The Facts Behind Facebook’s IPO – 5 Charts
No matter how you look at it, Facebook is the Internet’s 900 pound gorilla. While on an individual level, many of us don’t count the minutes we spend on there since they’re interspersed with other online or mobile activities, collectively across the global Facebook ecosystem they add up.
Thus it’s no surprise Facebook could be worth between $75 and $100 billion based on the numbers released in their IPO filing. A deeper look into Facebook’s data and financials reveals insights into their future prospects of interest to users, marketers and investors.
Facebook: The global perspective
According to Facebook’s SEC filing, they have 845 million monthly active users globally, of whom 483 million are daily active users or roughly 60%. Facebook participants create a mind boggling 2.7 billion likes and comments and upload 250 million photos per day. That’s a lot of content and communications! (Here’s an interesting look at why we friend.)
425 million monthly active users connect to Facebook via a mobile app or via mobile-optimized versions of its website, such as m.facebook.com on either a phone or tablet. Of interest is the fact that Facebook currently doesn’t monetize these impressions since these mobile options have no advertising. Greg Sterling of Search Engine Land roughly estimated the value of this mobile advertising to be about $2.5 billion.
From a global perspective, Facebook continues to grow and overtake local social networks. Given Facebook’s 2011 track record in the Netherlands, Vietnam and Brazil, it’s poised to take the lead over local social networks in Japan, South Korea, Russia and Poland according to comScore. What’s missing from this list? China where Facebook use is restricted.
Facebook: A view from the U.S.
Roughly one fifth of Facebook’s usage is in the U.S. according to their IPO filing. In the U.S., Facebook accounts for one out of every eleven online visits and one out of every five pageviews. Further, each visit lasts about twenty minutes according to Hitwise. In terms of gender, Facebook skews slightly more female (57%) versus male (43%). This makes sense given that most of the content exchanged tends to align with more female interests.
All roads lead to Facebook including search. Facebook is the most searched term in the U.S. Facebook related searches account for one out of every seven searches in the U.S. based on Experian Hitwise data.
What does Facebook’s IPO mean to marketers?
From a branding perspective, slightly more than 1% of fans of the biggest brands on Facebook actually engage with the brands, according to a study from the Ehrenberg-Bass Institute and reported in AdAge. From a marketing perspective, Facebook is a lot like using mass media to get broad reach but actual engagement takes longer. Researchers found Facebook fans tended to skew towards higher buyers. As a marketer, it’s critical to understand what your audience wants from you on social media platforms. (Here’s more research and insights as to what a Facebook like is worth from a marketing perspective.)
Is Facebook an online advertising magnet? The answer, as with any accounting question, is: it depends. Since U.S. advertisers accounted for over half of the advertising revenues, Facebook has the ability to more fully monetize its non-U.S. user base. Additionally, given its mammoth database of information, it could deliver enhanced advertising opportunities and/or sell the information in a way that removes specific personal details.
Show me the money!
Facebook earned $3.7 billion in 2011, an 88% increase over 2010’s revenues. 85% of Facebook’s revenues came from advertising and 12% came from Zynga, a gaming company best known for its games Farmville and Mafia Wars. Before you count future sales, note that Facebook’s filing states their current agreement with Zynga ends in 2015, a mere three years away.
For Henry Blodget of Business Insider, one of the issues with Facebook’s valuation is that its revenue growth quarter over quarter is decreasing. Further, Facebook’s revenue growth relative to other tech firms like Google is lower. Business Insider’s graphs illustrate Facebook’s revenue challenge.
Since as marketers you need to be where your prospects and customers are, this means Facebook. It’s IPO will bring marketers more sophisticated and targeted advertising and marketing solutions with related higher price tags to feed the company’s increased need for revenue growth. Along with the increased Facebook expense, you’ll need related marketing support, content and budget.
What’s your perspective on Facebook’s IPO and why do you feel the way you do?
Here are some related articles you may find of interest.
- 5 Reasons Facebook’s Best Days May Be Behind It‘
- 50 Questions to determine social media succes
- Do You Have The SMB Social Media And Mobile Smarts For Success?
- 13 Social Media Insights Every Marketer Needs
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