Facebook shrugs off advertising boycott to post fastest growth since before coronavirus

The social media giant returned to its previous booming revenues, suggesting a huge hate speech boycott did little to dent its bottom line

Facebook has shrugged off the impact of this summer's massive advertising boycott, posting its highest year on year revenue growth and its biggest profit since before the pandemic.

The social media giant, which also owns Instagram and WhatsApp, brought in about $21.5bn (£16.6bn), an increase of 22pc from the same time last in 2019, and made $7.8bn in profit, up 29pc year on year. 

Monthly active users for the core Facebook social network rose by 1.4pc since June to 2.7bn, or 2.6bn when adjusted for fake accounts, while the estimated number of people using at least one of Facebook's services each month boomed to 3.2bn.

The results suggest that there has been very little financial impact from the hundreds of companies, including giants such as Ford, Adidas and Coca-Cola, who froze advertising in July in protest against Facebook's hate speech policies

Data from the analytics firm Pathmatics had suggested that around $370m could be lost from Facebook's top 500 advertisers. The online advertising market has also recovered than expected as businesses scramble to go digital.

The company is bracing for a tumultuous US presidential election in which misinformation and extremist movements spread or incubated on its services could spark civil unrest on or after polling day.

Facebook's share price in after hours trading remained at roughly the same level as earlier in the day.

Chief executive Mark Zuckerberg said: "We had a strong quarter as people and businesses continue to rely on our services to stay connected and create economic opportunity during these tough times."

The results were part of a triumphant evening of financial results for Silicon Valley, in which Amazon revealed a 200pc leap in profits and Google recovered from its slowdown over the summer.

However, Facebook said that it expected a bumpy 2021 once the holiday season boom has passed, citing an iPhone privacy crackdown that could slash its mobile advertising revenue and uncertainty surrounding data transfers to and from the European Union following a court decision that scrapped the treaty that governs them.

On Wednesday, Mr Zuckerberg was one of three tech bosses hauled before the US Congress by Republican legislators to respond to accusations of anti-conservative bias and algorithmic censorship.

Debra Aho Williamson, a principal analyst at eMarketer, said: "Facebook has rebounded nicely from both the early-pandemic advertiser pullout... and from the ad boycott. 

"Despite its challenges with election turmoil and content moderation, it remains a go-to for advertisers seeking to engage a broad base of consumers.

"Looking ahead to 2021, we expect that more advertisers will take a hard look at their reliance on Facebook and will ask themselves whether the environment is safe for their brands."

Facebook's monthly users in North America and Canada dropped marginally from their total in June, when they surged under lockdown to reach 69pc of the two countries' combined populations.

Meanwhile, shares in Twitter crashed by as much as 15pc in after hours trading as it reported bumper revenues and healthy advertising engagement but sluggish user growth.

After adding 20m daily active users in the spring, the social network grew by just 1m in the three months ending in September, while its revenue rose by 14pc year on year to $936m.

Tamara Littleton, chief executive of the social media agency The Social Element, said: "To continue recovering ad dollars as brands rebuild their marketing momentum, Twitter must work hard to position itself as a brand safe environment. The problem for the platform is that misinformation is now the nature of the beast."

She said Facebook's new e-commerce products, such as in-chat shopping on WhatsApp, might struggle over the next year to compensate for the reputational damage that the election could cause.