The advertising business that supports Facebook is reaching saturation

Facebook, along with Google, is one of the most successful advertising companies in the world, but it is reported that its advertising business is saturated. There are several ways Facebook can increase revenue, such as 'increasing the number of ads displayed on the platform' and 'acquiring another platform', but it is said that none of them can be selected as a means.

Facebook Ads Could Be Reaching Saturation Point --WSJ

https://www.wsj.com/articles/facebook-ads-could-be-reaching-saturation-point-11606132807

Are Facebook Ads at Saturation as Users Seek Other Venues? – 24/7 Wall St.
https://247wallst.com/media/2020/11/23/are-facebook-ads-at-saturation-as-users-seek-other-venues/

In June 2020, major companies and others carried out a boycott campaign to cancel advertising on Facebook, saying that Facebook's measures against racial discrimination were insufficient. Nonetheless, it was talked about that Facebook increased revenue. In addition, Facebook's third-quarter earnings report released on October 29, 2020 shows that the company's revenue increased 22% year-on-year, a significant growth despite the advertising boycott. ..

In this way, Facebook's revenue increased significantly in 2020, but its performance is due to the acceleration of the transition from offline to online due to the epidemic of the new coronavirus infection (COVID-19) and the impact of lockdown. Is believed to be. As a result, vaccine development could have the opposite effect after 2021 and reduce profits. Facebook itself suggested in its earnings report that growth in 2021 could slow.

Facebook also bought Instagram for 1 billion yen in 2012 (about 81 billion yen at that rate), but according to The Wall Street Journal, as of 2020, a quarter of Facebook's advertising revenue will be It is from Instagram.

Facebook's annual revenue reaches $ 70.8 billion, of which 98.5% is advertising revenue. Therefore, in order for Facebook to increase revenue, it is possible to increase the number of advertisements displayed on the platform or increase (acquire) the platform for displaying advertisements.

However, the number of ads displayed on Facebook and Instagram has increased by an average of 30% since 2015, and if more ads are added, users who dislike ads may leave the platform.

Also, if you can not increase the number of ads per platform, there is a way to raise the ad unit price, but if you set the ad unit price too high, it is possible that the side that advertises will flow to other platforms this time. ..

Snapchat and Pinterest, which are much smaller than Facebook but also profitable from advertising, saw revenues increase by more than 50% year-over-year in the third quarter of 2020. There are ways to buy these emerging platforms to increase revenue, but it seems unlikely that the government will allow Facebook, which is being watched for antitrust violations, to do so. I am. Although it is not known until 2021 what will actually happen to Facebook's profits, it is said that the stock price is also falling due to such a situation.