What’s On

Three takeaways for marketers from FB’s Q3 earnings

Facebook’s revenue in the third quarter grew 33 per cent year over year to $13.7 billion.

“Our community and business continue to grow quickly, and now more than 2 billion people use at least one of our services every day. We’re building the best services for private messaging and stories, and there are huge opportunities ahead in video and commerce as well,” said Mark Zuckerberg, Facebook founder and CEO.

Q3 total ad revenue was $13.5 billion, up 33 per cent or 35 per cent on a constant currency basis. In terms of regional ad growth, Asia Pacific was strongest at 38 per cent, followed by Europe and North America at 34 per cent and 33 per cent, respectively. Rest of world ad growth trailed at 26 per cent due to both currency weakness and economic challenges in Latin America. Mobile ad revenue was $12.5 billion, up 40 per cent, and represented approximately 92 per cent of total ad revenue.

Sheryl Sandberg, CFO, Facebook, said, “It was another good quarter for our business. Over 90 million businesses rely on Facebook pages to reach potential customers for free. In a global survey, half of small businesses with a presence on Facebook said that they are hiring because of growth they’re able to achieve through our platform. More than 6 million advertisers are active across Facebook, Instagram and our other services. With more than 2 billion people using at least one of our services every day, we’re the best place for these advertisers to show people ads that work.”

Dave Wehner, CFO, Facebook, highlighted that. “Daily active users on Facebook reached 1.49 billion, up 9 per cent compared to last year, led by growth in India, Indonesia and the Philippines. This number represents approximately 66 per cent of the 2.27 billion monthly active users in Q3. MAUs were up 199 million or 10 per cent compared to last year.”

Commenting on Facebook’s earnings, Yuval Ben-Itzhak, Chief Executive Officer at Socialbakers,”Despite mixed results, the Q3 earnings have shown yet again that for marketers, no other platform comes close to Facebook and its family of apps, in terms of scale and audience engagement. With 2.27 billion monthly active users, it is still the platform where most consumer engagement with brands is happening online. It is also no surprise that private messaging and Stories are the current growth drivers for the business. With the increased desire for privacy, users are looking more and more towards services like Messenger and WhatsApp to interact with brands and organisations in a safe and convenient way. With Facebook focusing its investment on the biggest opportunities for advertisers, video, communities and messaging, it’s hard to imagine that its future as the leading advertising powerhouse looks anything other than bright.”

The Marketer’s Takeaway
2.3 billion people now use Facebook every month, and 1.5 billion every day. There are now more than 2.6 billion people using Facebook, WhatsApp, Instagram or Messenger each month, up from around 2.5 billion last quarter.

1. Messaging on rise:
People now send around 100 billion messages each day using our services. Mr Zuckerberg said, “Even our second most popular service, Messenger, has a higher daily message volume than SMS had globally at its peak. And this isn’t just text. People share more photos, videos and links on WhatsApp and Messenger than they do on social networks.”

2. Stories matter:
People now share more than 1 billion stories every day. “We lead in almost every country. There are a couple of reasons we’ve focused on building Stories in all of our apps. First, I just think that this is the future. People want to share in ways that don’t stick around permanently, and I want to make sure that we fully embrace this. Second, Stories is a medium like feeds that can feel very different in very different contexts,” Mr Zuckerberg added.

3. Importance of Video:
Video is a critical part of the future. “It’s what our community wants as long as we can make it social, and I think will end up being a large part of our business as well. Video has grown a lot on our services, but as I mentioned earlier, we hit a dynamic where when it grows in feeds in Facebook and Instagram, it displaces some social interactions, and people tell us it makes the experience less valuable even though they’re spending more time on it,” Mr Zuckerberg said.

“So the solution to this has been building separate video experiences outside of our feeds with Watch on Facebook and IGTV on Instagram. And what we found is that when people seek out video experiences intentionally, they don’t displace social interactions as much, and the quality of the experience is generally higher. We’ve also been able to build experiences that help creators build communities around their content, which fits our mission and our focus to encourage meaningful interactions,” he added.

Shubhi Tandon

Shubhi Tandon is the Assistant Editor at Digital Market Asia. Fascinated by the evolving digital media industry, she has focussed on tracking developments in the Asia Pacific market since 2014.