Facebook’s making more money per user in North America than ever before
For the second consecutive quarter, Facebook’s growth has stalled in the U.S. and Canada and it’s lost active users in Europe. Facebook might not be able to add many more users in the U.S. and Canada, but it’s making more money from those already on the service. Last quarter, Facebook’s average revenue per user was $25.91 in the U.S. and Canada compared to $5.97 worldwide. This quarter, Facebook’s average revenue per user was $27.61 in the U.S. and Canada compared to $6.09 worldwide. That’s the highest it’s been for North America.
But unlike July, Facebook saw a nice bump in its stock price as it beat estimates on earnings and only slightly missed revenue estimates. That slipped to below 4 percent over the call. To lessen the blow of declining growth, Facebook CEO Mark Zuckerberg is emphasizing the billions across his network of services.
Here’s what you need to know:
The key numbers:
- 2.3 billion monthly active users and 1.5 billion daily active users (up 10 percent and 9 percent from the previous year, respectively)
- 2.6 billion monthly active users across Facebook, WhatsApp, Instagram and Messenger and more than 2 billion use at least one of those services every day
- Lost 1 million daily active users and 1 million monthly active users in Europe
- Added 20 million daily active users compared to the previous quarter (down from the 22 million Facebook added between Q1 and Q2)
- $13.7 billion in quarterly revenue (up 33 percent from the previous year)
- Profit was $5.78 billion (up 13 percent from the previous year)
- 92 percent of its ad revenue came from mobile (compared to 88 percent in the previous year and 91 percent in the previous quarter)
- Average revenue per user is $27.61 in the U.S. and Canada compared to $6.09 worldwide
What Wall Street wanted:
Facebook missed Wall Street’s revenue expectations, reporting $13.7 billion this quarter versus $13.8 billion predicted. The company attributed the miss to currency headwinds. The stock dropped 5 percent after the report’s release but rose to just under 1 percent within the next 30 minutes.
GDPR fallout continues
Facebook is still bleeding users in Europe. From the last quarter, it saw 1 million fewer monthly active users and 1 million fewer daily active users in Europe. Debra Aho Williamson, eMarketer principal analyst, attributed that decline to the “continuation of the fallout of GDPR we saw last quarter.” But despite that drop, she said, “given all the challenges Facebook has faced this year, this is a decent earnings report.”
Instagram remains shiny for advertisers
Facebook just isn’t a story about the power of the News Feed anymore. Last quarter, the company shared a new statistic to describe its scale across its family of apps: more than 2.5 billion people use Facebook, Instagram, Messenger or WhatsApp every month. This quarter, Facebook said that number is up to more than 2.6 billion and also added that more than 2 billion people use at least one of those services every day.
“We believe it’s a better way to measure the community over time because so many people use more than one of our apps,” Zuckerberg said on the call.
On the call, Zuckerberg said there’s an opportunity to introduce ads in the Explore section of Instagram, which suggests content to users.
Facebook is “following the playbook” with Stories
The majority of revenue made on Facebook comes from Facebook’s News Feed and Instagram’s feed, Facebook’s COO Sheryl Sandberg said on the call. But that may change. Facebook is shifting from a feed focus to being Stories-first, Zuckerberg said. Facebook has already opened up Instagram Stories and Facebook Stories to ads, but he suggested that there’s a lot more to be done. Facebook also plans to introduce ads in WhatsApp Status, its Stories-like feature.
“We’re following our normal playbook here on building the best product first … before ramping up ads,” Zuckerberg said.
‘More ad dollars move to Snapchat’: Why direct-to-consumer brands eye the platform as they diversify from Facebook
DTC advertisers are looking to make sure they aren’t reliant on a single platform and are exploring to spend more on Snapchat.
Broken windows, ‘cuddling breaks’ and interrupted video calls: Parents share realities of juggling work while homeschooling kids
After almost a year of rolling lockdowns, school closures and lack of access to childcare, parents are tired but laughing at the chaos.
How a DTC wine brand is finding first-party data in SMS
One DTC wine brand is looking to invest more heavily in SMS and text messaging communication to reach users and grow its first-party data.
SponsoredShoppable content is reshaping brand and publisher relationships
In recent years, brands and publishers have adopted affiliate marketing as an increasingly established method to audiences. However, what may seem to be a mutually beneficial arrangement between brands and affiliates on closer scrutiny reveals itself as a solution that comes with challenges. Meanwhile, the emergence of content commerce is opening different approaches to matching […]
‘They don’t really want me to have a voice’: Black women in PR say they feel isolated, held to different standards from their colleagues
Black women who Digiday spoke to believe PR agencies need to reexamine internal culture and hiring practices to become more inclusive.
‘Endless digital shelf’: Why some DTC brands are doubling efforts on Amazon
DTC brands are shifting ad and marketing dollars that were set aside for in-field marketing efforts to e-commerce.