10 Facebook Marketing Tips Based on 3Q2015 Earnings

Facebook Third Quarter 2015 Earnings In Marketing Terms

Facebook CakeDid you pay attention to Facebook’s third quarter 2015 earnings report?

As a marketer, you probably thought, “Why should I care about financial reports? It has nothing to do with my marketing.”

Relax you’re in good company. (Based on my years of graduate teaching, I know many marketers choose their profession based on their dislike of math!)

But as the largest social media network in the world, what Facebook does matters to your marketing and your company, including SEC required reporting.

Don’t take my word for it!

Check the data:

Facebook still dominates social media globally based on size according to Global Web Index. (Here’s the full global social media analysis.)

Social Media Behavior in 2015- Network size chart

Social Media Behavior in 2015- Network size (Chart from Global Web Index)

71% of US Internet users are on Facebook according to Pew Internet. (Here’s the full US social media analysis.)

Participants spend 20+ minutes per day on Facebook.

Facebook sends 24% of all referral traffic based on Shareaholic’s 300,000 websites. Shareaholic 2014 Social Media Traffic Referrals-Chart-2014

84% of B2B marketers use Facebook to distribute content (30% find it effective) and 94% B2C marketers use Facebook to distribute content (66% find it effective).

Download the Ultimate 2015 Marketing Checklist

 

Facebook’s community

Facebook Community Data-Chart-2015-Source Facebook

Facebook Community Data-Chart-2015-Source Facebook

Facebook facts marketers need:

  • 1 billion people use Facebook on Android devices.
  • 925 million people use Facebook Groups.
  • 80 million photos per day are shared on Instagram.
  • 1 in 5 of minutes people spend on their phones per day is with Facebook and Instagram.
  • 5+ billion photos are sent on the Facebook Messenger chat app.

Facebook third quarter 2015 earnings explained In marketing terms

Here’s what marketers need to know from Facebook’s third quarter 2015 earnings report. As a point of comparison, here’s an analysis of Facebook’s 2014 results.

Facebook Cake

Facebook third quarter 2015 user growth

Facebook’s revenues are mainly advertising based. Therefore, they’re strongly associated with audience growth and composition. They focus on reporting DAU (or daily active users) and MAU (or monthly active users).

Facebook’s MAU growth rate has declined since 2011. This makes sense since its audience growth is limited. Facebook has penetrated every age demographic and geography except China where it faces legal challenges and native options.

In their 3Q2015 report Facebook changed their monthly active user (or MAU) definition. This reduced their audience numbers.

We define a monthly active user as a registered Facebook user who logged in and visited Facebook through our website or a mobile device, or used our Messenger app (and is also a registered Facebook user), in the last 30 days as of the date of measurement.

Facebook removed actions that occur off of their site. Specifically, [users who] took an action to share content or activity with his or her Facebook friends or connections via a third-party website or application that is integrated with Facebook …] 

  • 1.01 billion DAUs on average for September 2015, up 17% year-over-year.
  • 894 million mobile DAUs on average for September 2015, up 27% year-over-year.

Facebook 3Q2015 Daily Active users

Facebook 3Q2015-Mobile Daily Users Chart

  • 1.5 billion MAUs as of September 30, 2015, up 14% year-over-year.
  • 1.3 billion mobile MAUs as of September 30, 2015, up 23% year-over-year.

1.39 billion of Facebook’s 1.55 billion MAU access the site via mobile.

1 out of 2 mobile users is mobile-only. Specifically, 727 million MAUs are mobile-only users, up 37% year-over-year. This audience is most likely located in emerging markets, where people primarily access the Internet via smartphones.

But users beware! The Facebook app can drain your iPhone’s battery unless you update it.

Monthly Active Facebook Users by Geography-3Q2015 Chart

Facebook Monthly Active Users on Mobile-3Q2015 Chart

Facebook Monthly Active Users on Mobile-3Q2015 Chart

Facebook Monthly Active Users -Mobile Only-3Q2015-Chart

Note: Facebook results don’t include Instagram or WhatsApp users unless they would otherwise qualify as such users.

Download the Ultimate 2015 Marketing Checklist

 

Facebook third quarter 2015 financial results

Most of Facebook’s revenues come from a combination of impression and click-based ads. Facebook’s other revenues include fees for virtual and digital goods.

  • Revenue was $4.50 billion, up 41% year-over-year.
  • Ad revenue was $4.30 billion, up 45% year-over-year
  • Other revenue from payments and other fees was $202 million, down 7% year-over-year. 

3 out of every 4 dollars of total 3Q2015 Facebook ad revenue came from mobile (specifically 78% of 3Q2015 ad revenue). Facebook ad revenue grew due to increased News Feed ads on mobile devices. Mobile advertising costs more than desktop advertising.

Facebook mobile advertising revenue grew due to:

  • Increased ad inventory demand. Partially due to more marketers actively advertising on Facebook.
  • Increased mobile user growth and engagement.
  • Increased number and frequency of ads displayed in News Feed including the quality, relevance and performance of those ads.

Facebook’s average price per ad increased 61% from 3Q2014 to 3Q2015. A product change to certain non-News Feed ads in 3Q 2014 increased the average price per ad. As a result, the ads displayed decreased while each ad’s prominence increased. 

Facebook ads impressions delivered decreased 10% from 3Q2014 to 3Q2015. This reduction in ads delivered reflects the shift towards mobile device usage where people see fewer ads than on a PC.

2.5 million advertisers are active on Facebook.

Social Media Network Advertising Revenues Worldwide-eMarketer Forecast Chart

Social Media Network Advertising Revenues Worldwide-eMarketer Forecast Chart

Facebook third quarter 2015 revenue by geography

Most of Facebook’s revenue comes from North America and Europe where average revenue per user is $10.49 and $3.47 respectively.

Asia-Pacific and the rest of the world yield average revenues per user of $1.39 and $0.94 or 25% or $1.1 billion in total. Yet these regions account for 65% of Facebook MAUs.

Facebook Average Revenue per User by Geography-Chart

Download the Ultimate 2015 Marketing Checklist

 

Facebook video

Introduced in 2014, videos on Facebook are important since there’s a premium for video ads. (BTW, here’s how to become a video director.)

The problem: Video ads have the potential for generating overrated views.

Facebook defines a video view as someone who sees a video for at least 3 seconds.

Facebook videos start playing as soon as they scrolls into the newsfeed. On YouTube and other services, a video must be manually started before it’s counted as played. As a result, Facebook video view numbers tend to be significantly higher than the number of people who actually watch them.

  • Facebook has 8 billion video views per day, twice the 4 billion daily views reported in April. 
  • 5+ million small businesses posted a video on Facebook using organic posts and ads in September 2015.
  • 500 million users watch videos on Facebook every day (according to Bloomberg via Business Insider). If this is true, people who watch videos, view a lot of them. Further, those videos are likely to autoplay.

Facebook’s newest product: M the VA

M is Facebook’s virtual personal assistant launched this summer in limited beta in its Messenger chat app. It’s a combination of AI (artificial intelligence) and people.

The goal: Make Messenger the first mobile stop in information discovery challenging Apple’s Siri and Google Now. It has the potential to increase revenues through a share of purchase activities.

Creepy? You decide.

Download the Ultimate 2015 Marketing Checklist

 

Duplicate and false Facebook accounts

Marketers beware!

Duplicate” Facebook accounts represent less than 5% of 2014 worldwide MAUs. Facebook defines a duplicate account as another account maintained by a user in addition to his principal account. As long as the account holders actively use these accounts, they’re less of a marketing problem. 

“False” Facebook accounts represent less than 2% of 2014 worldwide MAUs.

Facebook divides false accounts into 2 categories:

  • User-misclassified accounts where users have created personal profiles for a business, organization, or non-human entity. These entities should have a Facebook Page, not a personal profile.
  • Undesirable accounts represent user profiles Facebook determines are intended for purposes that violate its terms of service, such as spam.
What You Get When You Buy Traffic - Ad Fraud Infographic via Bloomberg

What You Get When You Buy Traffic – Ad Fraud Infographic via Bloomberg

Download the Ultimate 2015 Marketing Checklist

 

Facebook’s future priorities

Facebook’s revenue and investment priorities are as follows.

Facebook’s 3 revenue growth priorities:

  • Continue capitalizing on the shift to mobile. Includes expanding Instagram ads.
  • Get more marketers to use Facebook ads, especially video.
  • Make Facebook ads more relevant and effective with new ad formats and tools.

Facebook’s 3 investment priorities:

  • Core products and services to better serve its communities and businesses.
  • Next generation services. Includes Instagram, WhatsApp, and Messenger.
  • Long-term innovation efforts. Includes Internet.org and Oculus Rift’s consumer version.

Facebook future revenue options

Based on its history and results to-date, Facebook could implement the following options to grow revenues. (Note: These 5 options reflect Actionable Marketing Guide projections.)

  1. Reduce organic reach. This has been a classic Facebook move to force marketers to pay more for ads to target prospects.
  2. Increase ad prices based on demand. 2015 results reveal that Facebook already does this. As part of this effort, Facebook can create or expand premium audiences. At The Economist, I used this tactic to increase the number of business readers to meet demand and increase revenues.
  3. Add advertising to products where it doesn’t exist. The challenge is users may complain and targeting may be difficult.
  4. Continue to test new products to extend share of audience time. As a result, advertising and revenue shares will increase.
  5. Create database product(s) beyond advertising. Facebook has a deep treasure trove of information about its participants. Packaged properly this data has marketing value. (BTW, we made this point back in 2012 when Facebook held its IPO.)

Download the Ultimate 2015 Marketing Checklist

 

What Facebook’s third quarter 2015 earnings mean for your marketing

Based on Facebook’s 3Q2015 earnings, here are 10 Actionable Facebook Marketing Tips to keep your overall business plans on track to succeed. 

Actionable Facebook Marketing Tips

  1. Know your Facebook audience. Create a social media persona. Focus on the topics your followers find interesting on Facebook. Check BuzzSumo.
  2. Tailor your Facebook content to improve results. What does your audience seek from your firm on Facebook? Minimize your costs by tailoring your Facebook when you initially create the content
  3. Put your Facebook postings into context for your viewers. Like other social media, photographs perform better than text, especially happy people. Avoid stock images. Also, optimize your headline for Facebook.
  4. Encourage employees to share your company’s content via their personal accounts. Extend your Facebook reach by tapping into personal accounts.
  5. Always include a call-to-action. Don’t assume Facebook participants will know what to do next.
  6. Get your Facebook audience to connect with you off of Facebook. Protect against future Facebook changes. Entice readers to register for your emailing or to purchase from you. Offer them something they find of value.
  7. Track your Facebook results. Monitor the effectiveness of different Facebook activity to contribute to your goals.
  8. Continually test what works. Find out what performs best for your specific Facebook audience. Keep trying to improve your results.
  9. Support your Facebook activity with advertising budget. This is more important for B2C businesses.
  10. Diversify your social media activity. Don’t just focus on Facebook. Use owned and other social media networks.

 

Facebook continues to dominate the social media landscape.

Since Facebook’s revenue streams aren’t diversified, expect the social media giant to keep reducing organic reach and charge more for targeted advertising across devices and formats.

As a marketer, allocate budget, both people and money, to your Facebook strategy including content, participation and advertising.

Align your Facebook marketing with your overall marketing and business plans.

While you need to focus your marketing efforts, diversify your social media activity to ensure that you’re not at risk of losing a large share of your traffic due to a Facebook change.

What’s your favorite Facebook tactic and why?

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: https://www.flickr.com/photos/geekpulp/6192677953/

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