Facebook Wants To Be Your Friend… To Sell To You

Facebook.Wants.To.Be.Your.Friend_5.4.15

Facebook (NASDAQ: FB) just recently announced its Q1 2015 performance, reporting revenues coming in at $3.54 Billion.

Although it missed its projected topline revenue of $3.56 Billion, the other fundamentals point to a very rosy environment.

Actual earnings came in at $.42 per share, which exceeded its projected $.40 per share.

It also reported daily active users (DAU) coming in at 936 million, higher than the projected 920.2 million, and a 17% increase from 2014.

To say it’s dominating the digital landscape is an understatement. And it’s just not any digital landscape; it’s the ad revenue generating landscape.

Facebook’s growth and dominance of the digital ad revenue landscape that has our attention (and it should have yours as well).

Founded in February 2004 (yes, that’s only 11 short-years ago), Facebook has grown into THE dominant social media network. It is the Alpha Male, 800-Pound Gorilla among all social media properties, and it’s not even close.

And while many tech start-ups are still trying to figure out how to make revenue (for example, Snapchat), Facebook continues to expand its ad revenue-generating footprint.

Let’s take a look at three interesting Facebook ad stats:

  • Doubled domestic digital ad revenue grew over the last 2 years, increasing over 52% and passing the $5 Billion threshold in 2014
  • Garnering 37% of all mobile ad displays in 2014
  • Mobile revenue increased 20% points in 2014, and is growing as Facebook accounts for 1 out of every 5 minutes spent on a smartphone

All of these stats are indicating Facebook’s on-growing growth in the online advertising sector.

…And that’s just the beginning.

According to a great piece by Adrienne LaFrance of The Atlantic, it’s staggering to find out that Facebook drives approximately 25% of ALL web traffic. This figure is staggering when you think about the complexity of the Internet, and Google’s dominance over search.

And Facebook is monetizing this traffic every step of the way. From banner advertising, to in-feed boosts, to video, Facebook continues to capture and grow additional ad revenue programs inside its platform.

It has been widely published of the push that Facebook is making in working with news sites as people are coming to Facebook for their news. In turn, Facebook is in a position to market and capture ad revenue.

However, consumers are becoming savvier in how they access and use Facebook. That is why there will continue to be room for start-up tech companies who service a specific niche and/or functional need that Facebook cannot address because it would disrupt their core ad revenue model – e.g. see open vs. controlled social network in our recent featured company article – click here to read more.

We believe that Facebook’s future is very bright because of its content strategy. Content – either user generated content or partnered content, is king. And the crown fits Facebook pretty well.