Facebook generated $113.6 billion in ad revenue in 2022, compared to $115.6 billion in 2021 and nearly $85 billion in 2020.
Meta Revenue Breakdown
2022
%
Advertising
$113.64B
97.5%
Other revenue (payments and fees)
$809MM
0.7%
Reality Labs (primarily sales of Oculus, now called Meta Quest)
$2.16B
1.9%
Total
$116.6B
FourWeekMBA Intelligence Analysis
In 2022, advertising revenues represented 97.5% of the total revenues for Facebook (now Meta), with $113.64 billion in revenues, representing a slowdown compared to $115.65 in revenues for 2021.
Other revenues, comparing payments and fees, were $808 million in 2022, or 0.7% of the total revenues.
While Reality Labs (primarily sales of Oculus, rebranded as Meta Quest) amounted to $2.16 billion, or 1.9% of the total revenues, in 2022.
The digital advertising industry has become a multi-billion industry dominated by a few key tech players. The industry’s advertising dollars are also fragmented across several small players and publishers across the web. Most of it is consolidated within brands like Google, YouTube, Facebook, Instagram, Amazon, Bing, Twitter, TikTok, which is growing very quickly, and Pinterest.
Three core changes are impacting and reshaping the whole digital advertising industry:
Table of Contents
Cookieless web
The cookie has represented the enabler of the digital advertising industry, enabling tech companies to track the user journey across several platforms, thus making it possible to build the whole attribution machine.
Indeed, without attribution (the ability to say how a lead was generated), there would not be a digital advertising industry in the first place.
Yet, the cookie is getting retired. Google has planned the retirement of the cookie to its Chrome browser, thus determining the end of an era.
iOS privacy changes
Apple forced, in 2021, a privacy change policy, which makes the opt-in to advertising from third-party apps, like Facebook, explicit.
This means Apple will ask users whether they want to be tracked.
As you can imagine, this is already having a massive impact on Facebook’s businessmodel, which had to rebrand as Meta and invest billions into VR.
Privacy from regulation
Regulators are also pushing for more and more privacy within various platforms.
This makes it much harder to track users and thus makes the whole digital advertising machine lose efficacy.
While in 2021, Google and Facebook still peaked in terms of revenues.
By 2022, with a changed market context, Facebook’s revenues would be slashed for the first time, forcing the company into mass layoffs!
The year of efficiency
As the company was affected by a massive slowdown for the first time in its history, it started to rethink its efforts in the future.
First, by refocusing its efforts from the Metaverse to Generative AI.
Indeed, in the last couple of years, the Metevarse has costFacebook a massive amount of money, which was not justified as a return.
Indeed, in 2022, for some context, Reality Labs (the segment related to the Metaverse) generated $1.43 billion in revenue while posting an almost ten billion dollars loss!
As of September 2022, Facebook, rebranded as Meta, is a profitable company, generating $18.54B in net profits. Yet, if we look at its Reality Labs segment, which is in charge of building the Metaverse, it recorded a net loss of $9.44 billion in the first nine months of 2022.
As announced by Meta, the year of efficiency moves along a few key pillars:
Flatter is better
Leaner is better
Keep technology the main thing
Invest in tools to get more efficient
In-person time to build relationships and get more done
Mark Zuckerberg, Andrew McCollum, Dustin Moskovitz, Eduardo Saverin, Chris Hughes
Year Founded
February 2004, Cambridge, MA
Year of IPO
May 18, 2012
IPO Price
$38.00
Market Cap at IPO
$104 Billion
Total Revenues at IPO
$3.7 Billion by 2011, prior to the IPO
Total Revenues in 2022
$116.6B
Changed name
Meta, in October 2021
Employees
71,970 employees globally, as of December 31, 2021
Revenues per Employee
$1,642,693.97
Who owns Meta?
Mark Zuckerberg is the primary individual shareholder, with 81.7% of Class B shares, and 52.9% of the total voting power
Founded in February 2004, in Cambridge, MA, by Mark Zuckerberg, Andrew McCollum, Dustin Moskovitz, Eduardo Saverin, and Chris Hughes, Facebook IPOed on May 18, 2012, at a price of $38 per share, and a market cap of $104 billion and total revenues for $3.7 billion in 2011, prior to the IPO. In 2021, Facebook generated over $117 billion in revenues, and it changed its name in October 2021, to Meta. With 71,970 employees, Meta generated $1,642,694 per employee. Mark Zuckerberg is the primary individual shareholder, with 81.7% of Class B shares and 52.9% of the total voting power.
Facebook, rebranded as Meta in 2021, is primarily owned by Mark Zuckerberg, founder and CEO. Zuckerberg keeps tight control over the ownership and decision-making of the company. Other large individual shareholders comprise former COO Sheryl Sandberg and co-founder Eduardo Saverin. Large institutional investors include BlackRock, Vanguard, and Fidelity.
Facebook, the main product of Meta is an attention merchant. As such, its algorithms condense the attention of over 2.91 billion monthly active users as of June 2021. Meta generated $117.9 billion in revenues, in 2021, of which $114.9 billion from advertising (97.4% of the total revenues) and over $2.2 billion from Reality Labs (the augmented and virtual reality products arm).
ARPU, or average revenue per user, is a key metric for attention merchants like Facebook. It assesses the ability of the platform to monetize its users. For instance, by the end of 2022, Meta’s ARPU worldwide was $10.86. While in US & Canada, it was $58.77; in Europe, it was $17.29; in Asia, $4.61 and in the rest of the world, it was $3.52.
The ARPU, or average revenue per user, is a key metric to track the success of Facebook – now Meta – family of products. For instance, by the end of 2022, Meta’s ARPU worldwide was $10.86. While in US & Canada, it was $58.77; in Europe, it was $17.29; in Asia, $4.61 and in the rest of the world, it was $3.52.
As of September 2022, Facebook, rebranded as Meta, is a profitable company, generating $18.54B in net profits. Yet, if we look at its Reality Labs segment, which is in charge of building the Metaverse, it recorded a net loss of $9.44 billion in the first nine months of 2022.
Facebook is characterized by a multi-faceted matrix organizational structure. The company utilizes a flat organizational structure in combination with corporate function-based teams and product-based or geographic divisions. The flat organization structure is organized around the leadership of Mark Zuckerberg, and the key executives around him. On the other hand, the function-based teams based on the main corporate functions (like HR, productmanagement, investor relations, and so on).
Instagram makes money via visual advertising. Acquired by Facebook for a billion-dollar in 2012, today, Instagram is integrated into the overall Facebook (now rebranded as Meta) business strategy. In 2018, Instagram founders Kevin Systrom and Mike Krieger left the company as Facebook pushed toward tighter integration of the two platforms. In 2022, Instagram is the most successful product still, in Meta’s portfolio.
Founded in 2009 by Brian Acton, Jan Koum WhatsApp is a messaging app acquired by Facebook in 2014 for $19B. In 2018 WhatsApp rolled out customers’ interaction services, starting to make money on slow responses from companies. And Facebook also announced conversations on WhatsApp prompted by Facebook Ads.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
