Facebook IPO: What Its Numbers Mean [Data]

The Facts Behind Facebook 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 Facebook.

They’re interspersed with other online or mobile activities, collectively across the global Facebook ecosystem they add up.

So 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. Facebook currently doesn’t monetize these impressions since these mobile options have no advertising. Greg Sterling of Search Engine Land roughly estimated Facebook’s mobile advertising to be worth about $2.5 billion.

From a global perspective, Facebook continues to grow and overtake local social networks. Based on 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?

China, where Facebook use is restricted.

Facebook IPO: US view

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 11 online visits and one out of every 5 pageviews.

Each visit lasts about 20 minutes according to Hitwise.

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.

Contrary to what many believe, Facebook’s users by are relatively evenly aligned with the U.S. online population. This reveals the relative maturity of Facebook’s penetration.  

The high (96%) percentage of returning visitors versus the percentage of new (4%) visitors shows  Facebook user loyalty. It’s also a sign of Facebook’s maturity as a social media network.  

All roads lead to Facebook including search.

Facebook is the most searched term in the U.S. Facebook-related searches account for 1 out of every 7 searches in the U.S. based on Experian Hitwise data.

What marketers need to know about the Facebook IPO

From a branding perspective, about 1% of fans of the biggest brands on Facebook actually engage with them, according to an Ehrenberg-Bass Institute study reported in AdAge.Facebook fans tended to skew towards higher buyers.

Currently, Facebook is a lot like using mass media to get broad reach but actual engagement takes longer.  As a marketer,  understand what your audience wants from you on social media platforms. (Here’s what a Facebook like is worth from a marketing perspective.)

Is Facebook an online advertising magnet? 

The answer 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. users (although they’re probably not as valuable as US-based users).

Given Facebook’s 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 3 years away.

Business Insider’s Henry Blodget is concerned with Facebook’s valuation since its quarter over quarter revenue growth is decreasing. Further, Facebook’s revenue growth relative to other tech firms like Google is lower. 

The Facebook IPO bottomline for marketers:

As marketers you need to be where your prospects and customers are, this means Facebook.

Facebook’s IPO will bring marketers more sophisticated,  targeted advertising and marketing solutions. They’ll have 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?

Happy marketing,
Heidi Cohen


Here are some related articles you may find of interest.

Photo credit: http://webprintmedia.com.au/free-facebook-icon-pack

 

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4 Responses to Facebook IPO: What Its Numbers Mean [Data]

  1. Craig Grella says:

    This is really interesting Heidi. For all the people covering the Facebook IPO, no one has mentioned this angle yet, and I think it’s really important for two reasons. It will obviously change the way advertising is done – from a cost standpoint, but it also means that nonprofits will have to change they way they work as well. It now behooves them, more than ever, to work with people who really know how to navigate facebook and bring viewers and supporters to their causes. Like the real estate market – you can’t just throw a for sale sign up anymore and hope to get the buyers. You need to know the market, place the right ads and work the campaigns. I think it will be so with Facebook too.

  2. This article is a great line out of how social media can be used for
    development and In my opinion is a precursor to the next trend
    of crowdsourcing. While the concept of using crowd support to create
    new relationship through social media such as facebook, Big companies are
    going to be increasingly turning to customers for complete social
    ideas. We are in the era of instant feedback where companies that use
    social media for their development will find themselves ahead of the
    curve.

  3. I think the biggest risk factor in the growth of Facebook is the fact that so many users really hate Facebook and have left or are planning to leave. And if they stay, they are spending less and less time every day. I think the redesign was a PR disaster. Forcing people into “Timeline” is a disaster. And, in general, people are bored with Facebook and ready for the next thing to come along which was always Facebook’s biggest risk. I just can’t see this as a long-term buy. 

  4. From a marketer’s perspective, Facebook represents the ultimate customer segregation tool. Users self-classify their interests in everything from musical taste to hobbies, and places they’ve visited.