Cheatsheet: Facebook’s facing a $3b+ fine but has 7m advertisers
Facebook’s advertising business is still thriving, despite all of the scandals and the mishaps with its ads manager. The company brought in $15.1 billion in the first-quarter of 2019, with 93 percent coming from mobile ads, according to its April 24 earnings report.
But Facebook’s profits were less flattering due to the legal expense of at least $3 billion with the Federal Trade Commission. That ongoing legal battle hasn’t stopped the ad dollars from flowing to the platform nor has it prevented more users from joining the service.
Here’s what you need to know:
The key numbers:
- 2.38 billion monthly active users and 1.56 billion daily active users (both up 8 percent from the previous year)
- 2.7 billion monthly active users across Facebook, WhatsApp, Instagram and Messenger (same as last quarter) and more than 2.1 billion use at least one of those services every day
- Added 39 million daily active users (up 20 million from the previous quarter)
- $15.1 billion in quarterly revenue (up 26 percent from the previous year)
- Profit was $2.4 billion (down 51 percent from the previous year)
- 93 percent of its ad revenue came from mobile (compared to 91 percent in the previous year and the same as the previous quarter)
- Average revenue per user is $30.12 in the U.S. and Canada, compared to $6.42 worldwide
What Wall Street wanted:
Facebook overshot revenue expectations, reporting $15.1 billion this quarter versus $15 billion predicted by Wall Street. Facebook’s stock increased by 5% shortly after the report’s release during after-hours trading.
Facebook’s FTC negotiations are ongoing
Facebook has been negotiating with the Federal Trade Commission over the last few months regarding a settlement for its privacy violations, most notably with Cambridge Analytica. As part of its earnings report, Facebook revealed it’s estimating the fine to be between $3 billion and $5 billion, and that the company has set aside $3 billion so far.
“There’s not much more to add on that front,” said Facebook chief financial officer David Wehner when asked on the call.
Stories are growing across Facebook’s apps
Instagram Stories may have been Facebook’s first clone of Snapchat’s Stories product, but the medium has gained traction across WhatsApp and Facebook as well. Zuckerberg said each of the three platforms has more than a half a billion daily active users using Stories.
Chief operating officer Sheryl Sandberg shared last quarter that 2 million advertisers were using Stories, and that’s now up to 3 million. The largest growth in impressions are coming from Stories, but they aren’t bringing in as much revenue since the prices are low.
“Ultimately we believe we can increase demand for Stories … and overtime that will play in increase prices but this will take years, not quarters, so in the near time we’ll see a meaningful discount in prices on Stories,” Wehner said.
Zuck says its privacy roadmap won’t ‘cannibalize’ public platform
Facebook’s News Feed brings in the bulk of Facebook’s revenue. But when it comes to future products, Facebook is focusing on other spaces, which is concerning when it comes to monetization. Zuckerberg predicted the move to encrypted message won’t have an immediate impact on the ads business. He said it also won’t mean the end of public sharing.
“I expect the digital town square will always be important, but there’s a lot more to build there. Over time, I think there’s a bigger opportunity to the digital living room. We all need to communicate privately,” Zuckerberg said.
Facebook will reveal more of its roadmap publicly during its annual developer conference F8 next week, Zuckerberg said.
Facebook is making more money from more advertisers
Last quarter, Facebook shared it has 7 million active advertisers. This quarter, Sandberg revealed how much all of these advertisers are contributing. Facebook’s top 100 advertisers in the first-quarter of 2019 accounted for less than 20% of Facebook’s total ad revenue, Sandberg said. “This means that our advertising base is more diverse than it was this time last year,” she said.
‘Change without story is a mandate, change with story is purpose’: Why marketing and comms execs are being tapped for chief-of-remote roles
Chief of remote roles are gaining in popularity, and it's marketers and communications execs that have the skills to fit the bill, experts believe.
‘A few more strategic decisions’: What it’ll take for TikTok’s ad offerings to get advertiser buy in
The momentum is there, but TikTok's lagging analytics and targeting offering has advertisers playing it safe with organic strategies.
‘She was the most sexually harassed person I ever met’: Confessions of a former Activision Blizzard employee on the company’s toxic work culture
In this edition of our Confessions series, we hear from a former customer service specialist at Activision Blizzard about the company’s toxic work culture.
SponsoredHow the ad industry can use its borrowed time to future-proof first-party data solutions
Trent Lloyd, co-founder and head of brand solutions, Eyeota Google’s updated timeline for its Privacy Sandbox rollout, including its two-year delay of third-party cookie deprecation on Chrome, didn’t come as a surprise to many industry observers, given the limited utility of Google’s FLoC and the slow momentum of the Privacy Sandbox in the World Wide […]
Horizon Media agencies ply new ground with incentive-based deals tied to compensation
Horizon Media agencies Big and Blue Hour cut an unusual incentive-based deal with DTC company Windmill, which lets client and agency make money if goals are reached.
How job seekers are standing out and staying top of mind during virtual job interviews
Candidates are competing for jobs on a computer screens so they are doing whatever they can to make their personalities and skills stand out.