Facebook Results: Their Sales Are Up – Are Yours?

What Facebook Results Mean For Marketers [Charts]

Mark zuckerberg of Facebook via Robert Scoble Facebook’s 4Q2014 revenues were $2.59 billion, up a whopping 28.2% over 3Q2013. While great for Wall Street, Facebook’s financial improvement doesn’t necessarily spell success for marketers.

Facebook results: users

Facebook has a mind-boggling 6 billion likes per day from its 757 million users. Of note is the fact that US and Canadian users numbers have remained relatively flat. This is a sign that it’s a mature user base. (Here’s research foreshadowing Facebook’s decline.)

Facebook results-Daily Active Users through 4Q2013

In terms of device usage, mobile only Facebook monthly active users (MAUs) account for roughly a quarter of the user base. About half of Facebook’s monthly active users use a mobile device at least some of the time. (Here is more data on mobile Facebook usage.)

Facebook results: 4Q2013-Monthly Active Users By Device via Business Insider

Facebook results: Revenues

Facebook’s results revealed a disconcerting trend. Advertising accounts for over 90% of Facebook’s revenues. In 4Q2013, this resulted in increased revenues due to higher priced mobile ads.

Facebook results- advertising is over 90% of 4Q2013 revenues

Further, mobile advertising accounts for over half of Facebook’s ad sales. 

Facebook results -Ad Revenue Breakout by device 4Q2013 via Business Insider

Facebook revenues broken out by participant region reveals: the US and Canada account for 46.7% of revenues, Europe accounts for 28.1% of revenues, Asia accounts for 13.2% of revenues, and Other accounts for 12.0% of revenues. While other areas contribute to the bottom line, the US and Canada drive significantly more sales relative to their user population (19.4% of the 4Q2013 total).

Facebook results-Revenues by User Geography-4Q2013

A deeper look at Facebook’s earnings reveals 2 driving factors:

  1. Holiday-related advertising. This is a seasonal sales bump that Facebook gets every year. The lion’s share of these revenues come from the US and Canada, where Internet and Facebook usage are mature.
  2. Mobile advertising. Facebook’s users are moving to mobile, a fact noted here before. More importantly, a good proportion of the mobile population only accesses Facebook via mobile. Translation: Quick check-ins and content snacking. Since over half of Facebook’s revenues already come from mobile where there’s less ad real estate, future sales growth (or advertising opportunities) are limited. Further, expect Facebook to keep mobile ads artificially more expensive due to pressure to show increased revenues.

3 Factors marketers must consider re: 4Q2013 Facebook results

 

1. Don’t look for teens on Facebook

Facebook carefully omitted mentioning the teen demographic. (Here are the Facebook teen charts and data from 2013.) When asked directly about teens, they quickly pivoted to another point. By not answering this question directly, Facebook confirmed without providing direct fodder for stock prices that teen activity hasn’t changed significantly. If teen usage had increased, they would have discussed it as a win. (Note: This is confirmed by Global Web Index’ Global Social Media Trends that show Facebook’s sweet spot to be 25-34 year olds.) What this means for marketers: Teens, Facebook’s growth engine and key advertising demographic, continues to be on the downturn. Facebook is no longer the place where the cool kids are!

2. Not all users are of equal value for advertisers

Mark Zuckerberg emphasized that increasing Internet access globally would help Facebook. Since most mass product usage increases annually due to population growth. This is a fancy way to say Facebook will get higher than ordinary growth as Internet access expands.

Yet, this focus neglects the fact that most of the world’s wealth (and a disproportionate part of Facebook’s revenue base) is already online. Therefore, more Facebook users don’t necessarily translate to more revenues (although they may require additional costs.)  Business Insider-Global Internet Population-2013 Business Insider-Global Income On Line-2013-1 Facebook Results: Monthly Active Users- US is mature What this means for marketers: Your potential target audience is probably already using (or may have left) Facebook. Therefore, diversify your social media interactions.

3. Higher quality Facebook ads are required.

Zuckerberg discussed serving ads that are as strong as content from member’s family and friends. Facebook neglected to discuss how it’ll determine ad quality and its impact on advertising pricing. What this means for marketers: Facebook ads, both creation and distribution, will increase in cost since they’ll need quality content and placements will carry a premium expense.

While Facebook should still be a part of your social media, content marketing and mobile strategy, as a marketer, you must understand that participants’ on-the-go, content snacking activity will translate to less time on the site, both mobile and desktop.

Bottom Line—don’t put all of your marketing and advertising resources into Facebook (or any single platform for that matter!) Facebook’s pressure to show strong financial results will reduce your content marketing’s reach and increase related advertising costs on Facebook.

What do you see in the future for marketers who want to use Facebook?

Happy Marketing,
Heidi Cohen


Heidi CohenHeidi Cohen is the President of Riverside Marketing Strategies. You can find Heidi on , Facebook and .

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Photo Credit: Robert Scoble via http://www.flickr.com/photos/scobleizer/5179395448/

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  • http://thetopfivepercent.com/ Stephen W. Anderson

    You knew it was coming when they did the IPO and Zuckerberg made all that money. Just a matter of time before the teens started leaving. Its the folks left who have the money to click on the exit splash ads, and those are not targeted at kids.

    The next time Match dot com, or Flo the Progressive girl, or State Farm life insurance for exit come up exit splash ads, you can see by the photos that teens are not the market.

    • Michelle

      Facebook did recently acquire Branch. Could be their way of creating a more intimate space for the younger generations to have less public conversations. Because as Heidi’s post shows – Facebook isn’t going anywhere soon.

      • http://thetopfivepercent.com/ Stephen W. Anderson

        Maybe so, I don’t think they are going away and I think the people they are targeting have money to spend and are willing to do that. Hopefully they will avoid myspacing themselves out of relevancy.

  • Annie Khan

    Facebook is a big part of the social media. Now the google plus is competing with the facebook and definitely it is going to beat the facebook but facebook will give a tough time. Facebook is not going anywhere yet. Social media is the great tool for helping in business success and the facebook has a great role in it, but i agree with you that one should not totally rely on a single platform of a social media.