10 ms·

Facebook Q3 2016 Results

154 points by blawson 10y ago

ejcx 10y ago
Will anyone explain why the stock is down quite a bit in extended house? The numbers look very strong to my non-finance background...
- kgwgk 10y ago
  "Facebook shares declined as much as 7.8 percent Wednesday after two sobering comments on its conference call. First, Chief Financial Officer David Wehner said revenue growth rates will come down “meaningfully” next year, because the company won’t keep increasing the percentage of ads that Facebook users see in their news feed. Second, capital expenditures will rise “substantially” in 2017 as the social network works to recruit the best engineers and build data centers, he said." https://www.bloomberg.com/news/articles/2016-11-02/facebook-generates-record-revenue-on-growth-of-mobile-video-ads https://www.bloomberg.com/news/articles/2016-11-02/facebook-...
mbesto 10y ago
Wanna know why tech companies get such high valuations? Look at the operating margin and net income increase in just 1 year: https://twitter.com/mbesto/status/793921076820459520 https://twitter.com/mbesto/status/793921076820459520 That makes investors absolutely drool.
- wmeredith 10y ago
  Powerball ticket pools make people drool, too. Companies like this are called unicorns for a reason-they don't exist (statistically speaking).
  - morgante 10y ago
    The difference is that I can't go and buy shares in the winning Powerball ticket.
    - toennisforst 10y ago
      You can: Assuming that Powerball simply collects all earnings and pays them to the winner (they don't and keep a share), simply regard your lottery ticket as your share and deposit the price you pay in your savings account.
      - morgante 10y ago
        You seem to deliberately ignoring the fact that Facebook is a publicly traded company. You can't go up to the lottery winner and offer to buy part of their winning ticket. You can buy shares of Facebook today (in fact, at a nice discount currently).
  - the_watcher 10y ago
    I'm curious - are you comparing Facebook, the company with nearly 5 years of success as a public company based on strategic decisions, to someone who wins a random chance lottery?
    - toennisforst 10y ago
      Because just like with lotteries, there are a lot of blanks, few small wins and a tiny amount of never-work-again wins: Many startups don't net the investor much, some make quite a bit after being acquired, and very few - such as facebook - turn out to be really successfull. Your phrasing suggests that you compare Facebook (now) with lottery as a system. You should rather see Facebook as a lottery ticket that turned out to be the jackpot.
      - the_watcher 10y ago
        Every lottery ticket has the same odds of winning, no matter the "strategy" employed in picking numbers, location of buying the ticket, etc. Facebook is not in any way a analogue, unless you are arguing that its success was entirely random, and would have stood an equal chance of happening if I had started it at a community college, then put the headquarters in Alaska, which is false.
  - eanzenberg 10y ago
    What's not statistical about outliers?
    - olegkikin 10y ago
      Statistically, you will not invest in one.
      - eanzenberg 10y ago
        I mean you may if the odds are good.
- bpicolo 10y ago
  And yet their stock is down today. =|
PuffinBlue 10y ago
That operating margin seems...impressive. Well, hopefully it's not just me, but doesn't 45% seem like they're extraordinarily profitable?
- RivieraKid 10y ago
  Yes and there's a reason for that. Profit margin is an approximative measure of how monopolistic the company. Facebook is a monopoly - because of network effects it's very hard to compete with them.
- jbob2000 10y ago
  It's pretty good, but not unheard of. Many banks and insurance companies hover around that number.
  - refulgentis 10y ago
    I was under the impression banks are happy to get 5-10% profit margin these days, is there a distinction between operating margin and profit margin that explains that?
  - eigenvalue 10y ago
    That's not really comparable because banks and insurers require a huge amount of capital to earn those margins. For example, JP Morgan (a pretty well-run and profitable bank) made a ~32% operating margin in fiscal 2015. But JP Morgan's return on tangible equity (a measure of net profitability relative to capital used) was only ~13%. Facebook, on the other hand, had a return on tangible equity of 25% in the last quarter. And as time goes by, that return on tangible equity should increase quite a bit for Facebook, while it is highly unlikely to improve all that much for JP Morgan because of competition in the banking industry.
    - adventured 10y ago
      Visa is the only financial company I know of with that kind of margin + profit scale. They're nearly capable of 50% net income margins (and $9b in operating income on $13.8b in sales). Also like Facebook they have relatively few employees compared to their immense profit.
jbob2000 10y ago
"Mobile advertising revenue represented approximately 84% of advertising revenue for the third quarter of 2016, up from approximately 78% of advertising revenue in the third quarter of 2015." Is advertising dead on the desktop?
- rdslw 10y ago
  Nah. You can only thank uncle do-not-evil-till-IPO-Google that they still block browser extensions on mobile. Resulting in no adblockers :-(
  - euyyn 10y ago
    As if people would go through the trouble of opening Facebook in a mobile browser instead of just using the app.
    - rdslw 10y ago
      More and more people (myself incl) are not using fb app. Reasons: * all time location tracking * inability to block ads (firefox allows to block ads on android) * making it harder to induce compulsive fb usage (its addictive) * battery usage (this is huge, try it)
      - nf05papsjfVbc 10y ago
        Also you don't need to let FB get the entire gamut of permissions possible on the phone.
    - deleted 10y ago
      [deleted]
    - saiya-jin 10y ago
      I do walk through it, it's painless (1 extra tap on screen) and it's exactly to not have FB apps on cell phone and not have ads displayed. I use FB less, which is good for healthier life. FB long lost its glamour, it's just another RSS news feed about friends/interests. Same for my fiancee.
wen3 10y ago
So Facebook is basically killing it in mobile without building phones and phone operating systems. Google whats up with that?
- harmegido 10y ago
  Android makes a ton of money for Google because for every Android phone, that's one more user they don't have to pay to have their default search engine be google. Take a look at the Oracle case - Google pays billions of dollars a year to Apple to have their search on iPhones. And it's not a flat fee, it's a percentage of revenue. Facebook doesn't have this problem because there is no other social network. Search engines don't really have network effects, facebook does.
- havetocharge 10y ago
  Why won't you Google it.
- refulgentis 10y ago
  It's fun being a free rider!
  - meira 10y ago
    Google should start show ads on top of Facebook. If you are not paying, you are the product ;)
    - zanny 10y ago
      Plenty of companies made money on Windows without directly paying Microsoft. Google gets some revenue from Android OEMs licensing the rights to distribute Gapps. If Facebook moves Android phone sales, Google makes money. Not nearly as much as MS did per unit, but Android is also installed on way more devices today than Windows ever could have hoped to be.
    - the_watcher 10y ago
      Google does advertise on Facebook. There's no way for them to put AdWords or AdSense ads on Facebook without their cooperation, and if you're suggesting they do it through Android, they can have a blast trying to sell Android phones when Facebook pulls themselves from them.
kennethh 10y ago
Traditional media companies are really feeling the pain now, and it is probably going to be even worse for them when the advertisers turn even more of their money to google and facebook.
NicoJuicy 10y ago
Tried Facebook ads for Pokemon Go ( 2nd largest Facebook group in my country - Belgium), had some success there ( 330.000 people reach / week for a month). But it's not worth it for regular businesses. I started a webshop and Google AdWords seems to be the way to go. Side note, we did events. One Facebook group had 2x as many members and was also spanning the Netherlands, they had 1/10th of our ticket sales. We were the first to combine amusement parks with Pokémon Go ( and cheaper then normal tickets, our revenue was a % on the ticket price) Facebook seems to be an empty bucket. The ones who share your posts, share everything from everyone, while you give things away for free. It's the only way to receive a lot of likes, but those aren't the people you want and going to buy your stuff. You aren't anything with likes. Invest in newsletters and a decent email campaign, that way you don't have to pay for the people that 'subscribed' to you, to let them see posts. Ps. Pokemon Go was 0,03 € / like. Normal businesses pay 1€ / like in my experience. Don't go that road :) Ps2. I don't do remarketing too. But that's personal preference, as i don't want to stalk people. I want them to find me, when they are looking for me Ps3. AdWords for me is 1€/ day, which is the minimum. And I'm quite happy with it for my niche, which gives me 10 visitors and 1 purchase every 2 days ( pretty high margin) Ps4. If you want to go on Facebook, remember you have to pay for: promoting your post, promoting your page and promoting your website. So facebook passes 3 times at the cash register. Pokemon Go was all on max for several days, which is 50€ x 3 per day! And in case you forgot, likes !== Customers and you still have to write good content :)
- the_watcher 10y ago
  I've been running >$1M annually in ads on Facebook for real businesses (both B2B and B2c) to great success. They have a higher CAC than AdWords, but perform substantially better than display ads, and consistently bring in clients that are top of funnel, but turn out to be high quality.
  - NicoJuicy 10y ago
    It seems to be your business: https://www.survata.com/ https://www.survata.com/ ( no offence, i'm just carefull when it's someone's work, but you did mention it) i'm curious about any real stats actually :) - Eg. http://www.denverpost.com/2012/07/03/gm-reconsiders-paid-facebook-advertising/ http://www.denverpost.com/2012/07/03/gm-reconsiders-paid-fac...
fumar 10y ago
Facebook is the least transparent ecosystem. As a marketer, I find it hard to invest dollars without being able to see or understand what percent of custom audiences are exposed to ads. For example, one can upload a file (list of emails) to a custom audience, lets say 1 M big, for FB to ingest. Voila your audience is active for targeting, but how many of those emails (users) will be targeted, who knows. FB's inventory is overpriced and untraceable.
- jonknee 10y ago
  Untraceable? You should buy a print ad and try to figure out if it was worthwhile!
  - NicoJuicy 10y ago
    That's why you have coupons :)
    - Raphmedia 10y ago
      At work we all bring our coupons, stick them in a jar and everyone can pick the ones they need. You must hate us!
  - fumar 10y ago
    If the digital landscape allows for transparent reporting to measure marketing's incremental lift or ROI, then that becomes the baseline. Facebook believes its inventory (users) are a cut above the rest, thus their opaque model. FB's advertising revenue is up 59% YOY, but that is not a clear signal growth will continue at the same clip. I foresee, digital marketers pushing back as marketing moves to a revenue generating business unit. Measurement becomes the backbone of all digital initiatives, can't measure FB as granular as display. Yes, you can't track traditional media's impact. At least not yet. Its the reason why digital marketing overall has been growing at ~30% YoY.
    - jonknee 10y ago
      Facebook provides plenty of conversion tracking features, if you can't figure out your ROI on FB advertising you're doing it wrong. There are obvious reasons why they wouldn't want to provide reports on what email addresses were marketed to (Google doesn't let you do that either...).
giarc 10y ago
Stock is down 1.8% at time of this comment... Did 166% net income jump not meet expectations?
- the_watcher 10y ago
  The whole market is down, which impacts them.
  - deleted 10y ago
    [deleted]
- meira 10y ago
  I guess investors are having the same feelings people are showing here. This don't look like a healthy company, imho. Facebook mobile ads looks like scam to me, in both ends. You pay money to interact with the people you expent money and work to bring.
  - SirensOfTitan 10y ago
    Both of your comments here have been composed of relatively strong opinions with nothing to back them up. Care to contribute anything to the discussion other than your potential bias?
    - meira 10y ago
      No, I dislike Facebook and this is enough for me to voice my opinion in a discussion, isn't? I'm not the kind that complain about free speech, but shouldn't you disagree and say why, if you want to, and not ask me to say more and only then your highness will evaluate? Come on, move to another comment if it bothers you but not enough to say something useful.
- jonknee 10y ago
  It was down 1.8% at the end of regular trading today (before the earnings call). It is down an additional 6.7% currently after bouncing around a bit--the conference call is not going well! You can see a chart of the after hours action by hitting "e" on the Google Finance chart (you may have to click on the chart first): https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1478123030266&chddm=391&chls=IntervalBasedLine&q=NASDAQ:FB&ntsp=0&ei=E14aWJnID6TKigKzxq64Bg https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...
taylorbuley 10y ago
I'm CTO at a local newspaper chain. I ran a seminar on how to digital advertising, then ran $500 in advertising to promote the event -- all as a test to see which advertising mediums I could use to get people to show up to learn about advertising. Here's the data and a summary: https://docs.google.com/spreadsheets/d/1DsJYUYETwQ7a-hISFPcCI7ojGtk2WtyGdxwQXSN6szQ/edit?usp=sharing https://docs.google.com/spreadsheets/d/1DsJYUYETwQ7a-hISFPcC... http://www.davisenterprise.com/special-projects/how-to-waste-less-money-doing-digital-advertising-next-time/ http://www.davisenterprise.com/special-projects/how-to-waste...
- searine 10y ago
  This is some incredible data. It's really refreshing to see someone share it.
- NicoJuicy 10y ago
  Nice summary, thanks for sharing!
- rattray 10y ago
  tldr?
  - r00fus 10y ago
    Fta: "What the ROI chart says is that the return for the social ads was zero. They were a complete waste of money. They generated a lot of “action” but it was at best the wrong group of people, and at worst some type of fraud. This held true for facebook.com and its audience network. Ditto Google search ads, display ads and the Twitter campaign."
    - johnking 10y ago
      "Ditto Google search ads" checks article He spent less than $5 on Search ads... Hard to be drawing conclusions with that data set.
- jackgolding 10y ago
ucha 10y ago
How did they go from paying an effective tax rate of around 40% between Q3-14 to Q4-15 to an tax rate of 25% this quarter? Notably, they had 2,557 MUSD in income in Q4-15 and paid 995 MUSD in taxes and this quarter they have a larger income of 3,169 MUSD but pay less in taxes, 790 MUSD. [0] [0] https://s21.q4cdn.com/399680738/files/doc_presentations/FB-Q316-Earnings-Slides.pdf https://s21.q4cdn.com/399680738/files/doc_presentations/FB-Q... - slide 22
- jonknee 10y ago
  It's a pretty meaningless number, they don't really pay that much in taxes. Their stock based compensation is artificially inflating it and that also explains the wild differences between quarters. http://qz.com/142032/why-is-facebooks-tax-rate-so-much-higher-than-its-competitors/ http://qz.com/142032/why-is-facebooks-tax-rate-so-much-highe... > Facebook pays its staff with stock options, and thanks to a quirk of tax law, Facebook end up with large costs that can be deducted later. The company issues options to executives and records their a rough estimate of their value in its earnings report. When the options are exercised and the executives purchase the stock, it has often increased in value beyond that estimate—and the company can deduct that new, higher value, even though it didn’t cost it any real cash.
radicaldreamer 10y ago
I think we've seen Facebook all-time-highs.
maverick_iceman 10y ago
Are they including tablet numbers in mobile?
debt 10y ago
lol snapchat is starting to sting
jpalomaki 10y ago
Might be interesting for Facebook to move from charging for ads to start getting their cut of successful sale. If they would crack this, there might be positive loop effect. Getting to know if users actually purchased something would give FB more data, which would allow better targeting. Implementation of course is not trivial. One way to make this work would be for Facebook to run the platform where purchase and payment takes place, like Amazon Marketplace.

154 points by blawson 10y ago

ejcx 10y ago

Will anyone explain why the stock is down quite a bit in extended house? The numbers look very strong to my non-finance background...

kgwgk 10y ago
"Facebook shares declined as much as 7.8 percent Wednesday after two sobering comments on its conference call. First, Chief Financial Officer David Wehner said revenue growth rates will come down “meaningfully” next year, because the company won’t keep increasing the percentage of ads that Facebook users see in their news feed. Second, capital expenditures will rise “substantially” in 2017 as the social network works to recruit the best engineers and build data centers, he said." https://www.bloomberg.com/news/articles/2016-11-02/facebook-generates-record-revenue-on-growth-of-mobile-video-ads https://www.bloomberg.com/news/articles/2016-11-02/facebook-...

mbesto 10y ago

Wanna know why tech companies get such high valuations? Look at the operating margin and net income increase in just 1 year: https://twitter.com/mbesto/status/793921076820459520 https://twitter.com/mbesto/status/793921076820459520 That makes investors absolutely drool.

wmeredith 10y ago
Powerball ticket pools make people drool, too. Companies like this are called unicorns for a reason-they don't exist (statistically speaking).
- morgante 10y ago
  The difference is that I can't go and buy shares in the winning Powerball ticket.
  - toennisforst 10y ago
    You can: Assuming that Powerball simply collects all earnings and pays them to the winner (they don't and keep a share), simply regard your lottery ticket as your share and deposit the price you pay in your savings account.
    - morgante 10y ago
      You seem to deliberately ignoring the fact that Facebook is a publicly traded company. You can't go up to the lottery winner and offer to buy part of their winning ticket. You can buy shares of Facebook today (in fact, at a nice discount currently).
- the_watcher 10y ago
  I'm curious - are you comparing Facebook, the company with nearly 5 years of success as a public company based on strategic decisions, to someone who wins a random chance lottery?
  - toennisforst 10y ago
    Because just like with lotteries, there are a lot of blanks, few small wins and a tiny amount of never-work-again wins: Many startups don't net the investor much, some make quite a bit after being acquired, and very few - such as facebook - turn out to be really successfull. Your phrasing suggests that you compare Facebook (now) with lottery as a system. You should rather see Facebook as a lottery ticket that turned out to be the jackpot.
    - the_watcher 10y ago
      Every lottery ticket has the same odds of winning, no matter the "strategy" employed in picking numbers, location of buying the ticket, etc. Facebook is not in any way a analogue, unless you are arguing that its success was entirely random, and would have stood an equal chance of happening if I had started it at a community college, then put the headquarters in Alaska, which is false.
- eanzenberg 10y ago
  What's not statistical about outliers?
  - olegkikin 10y ago
    Statistically, you will not invest in one.
    - eanzenberg 10y ago
      I mean you may if the odds are good.
bpicolo 10y ago
And yet their stock is down today. =|

PuffinBlue 10y ago

That operating margin seems...impressive. Well, hopefully it's not just me, but doesn't 45% seem like they're extraordinarily profitable?

RivieraKid 10y ago
Yes and there's a reason for that. Profit margin is an approximative measure of how monopolistic the company. Facebook is a monopoly - because of network effects it's very hard to compete with them.
jbob2000 10y ago
It's pretty good, but not unheard of. Many banks and insurance companies hover around that number.
- refulgentis 10y ago
  I was under the impression banks are happy to get 5-10% profit margin these days, is there a distinction between operating margin and profit margin that explains that?
- eigenvalue 10y ago
  That's not really comparable because banks and insurers require a huge amount of capital to earn those margins. For example, JP Morgan (a pretty well-run and profitable bank) made a ~32% operating margin in fiscal 2015. But JP Morgan's return on tangible equity (a measure of net profitability relative to capital used) was only ~13%. Facebook, on the other hand, had a return on tangible equity of 25% in the last quarter. And as time goes by, that return on tangible equity should increase quite a bit for Facebook, while it is highly unlikely to improve all that much for JP Morgan because of competition in the banking industry.
  - adventured 10y ago
    Visa is the only financial company I know of with that kind of margin + profit scale. They're nearly capable of 50% net income margins (and $9b in operating income on $13.8b in sales). Also like Facebook they have relatively few employees compared to their immense profit.

jbob2000 10y ago

"Mobile advertising revenue represented approximately 84% of advertising revenue for the third quarter of 2016, up from approximately 78% of advertising revenue in the third quarter of 2015." Is advertising dead on the desktop?

rdslw 10y ago
Nah. You can only thank uncle do-not-evil-till-IPO-Google that they still block browser extensions on mobile. Resulting in no adblockers :-(
- euyyn 10y ago
  As if people would go through the trouble of opening Facebook in a mobile browser instead of just using the app.
  - rdslw 10y ago
    More and more people (myself incl) are not using fb app. Reasons: * all time location tracking * inability to block ads (firefox allows to block ads on android) * making it harder to induce compulsive fb usage (its addictive) * battery usage (this is huge, try it)
    - nf05papsjfVbc 10y ago
      Also you don't need to let FB get the entire gamut of permissions possible on the phone.
  - deleted 10y ago
    [deleted]
  - saiya-jin 10y ago
    I do walk through it, it's painless (1 extra tap on screen) and it's exactly to not have FB apps on cell phone and not have ads displayed. I use FB less, which is good for healthier life. FB long lost its glamour, it's just another RSS news feed about friends/interests. Same for my fiancee.

wen3 10y ago

So Facebook is basically killing it in mobile without building phones and phone operating systems. Google whats up with that?

harmegido 10y ago
Android makes a ton of money for Google because for every Android phone, that's one more user they don't have to pay to have their default search engine be google. Take a look at the Oracle case - Google pays billions of dollars a year to Apple to have their search on iPhones. And it's not a flat fee, it's a percentage of revenue. Facebook doesn't have this problem because there is no other social network. Search engines don't really have network effects, facebook does.
havetocharge 10y ago
Why won't you Google it.
refulgentis 10y ago
It's fun being a free rider!
- meira 10y ago
  Google should start show ads on top of Facebook. If you are not paying, you are the product ;)
  - zanny 10y ago
    Plenty of companies made money on Windows without directly paying Microsoft. Google gets some revenue from Android OEMs licensing the rights to distribute Gapps. If Facebook moves Android phone sales, Google makes money. Not nearly as much as MS did per unit, but Android is also installed on way more devices today than Windows ever could have hoped to be.
  - the_watcher 10y ago
    Google does advertise on Facebook. There's no way for them to put AdWords or AdSense ads on Facebook without their cooperation, and if you're suggesting they do it through Android, they can have a blast trying to sell Android phones when Facebook pulls themselves from them.

kennethh 10y ago

Traditional media companies are really feeling the pain now, and it is probably going to be even worse for them when the advertisers turn even more of their money to google and facebook.

NicoJuicy 10y ago

Tried Facebook ads for Pokemon Go ( 2nd largest Facebook group in my country - Belgium), had some success there ( 330.000 people reach / week for a month). But it's not worth it for regular businesses. I started a webshop and Google AdWords seems to be the way to go. Side note, we did events. One Facebook group had 2x as many members and was also spanning the Netherlands, they had 1/10th of our ticket sales. We were the first to combine amusement parks with Pokémon Go ( and cheaper then normal tickets, our revenue was a % on the ticket price) Facebook seems to be an empty bucket. The ones who share your posts, share everything from everyone, while you give things away for free. It's the only way to receive a lot of likes, but those aren't the people you want and going to buy your stuff. You aren't anything with likes. Invest in newsletters and a decent email campaign, that way you don't have to pay for the people that 'subscribed' to you, to let them see posts. Ps. Pokemon Go was 0,03 € / like. Normal businesses pay 1€ / like in my experience. Don't go that road :) Ps2. I don't do remarketing too. But that's personal preference, as i don't want to stalk people. I want them to find me, when they are looking for me Ps3. AdWords for me is 1€/ day, which is the minimum. And I'm quite happy with it for my niche, which gives me 10 visitors and 1 purchase every 2 days ( pretty high margin) Ps4. If you want to go on Facebook, remember you have to pay for: promoting your post, promoting your page and promoting your website. So facebook passes 3 times at the cash register. Pokemon Go was all on max for several days, which is 50€ x 3 per day! And in case you forgot, likes !== Customers and you still have to write good content :)

the_watcher 10y ago
I've been running >$1M annually in ads on Facebook for real businesses (both B2B and B2c) to great success. They have a higher CAC than AdWords, but perform substantially better than display ads, and consistently bring in clients that are top of funnel, but turn out to be high quality.
- NicoJuicy 10y ago
  It seems to be your business: https://www.survata.com/ https://www.survata.com/ ( no offence, i'm just carefull when it's someone's work, but you did mention it) i'm curious about any real stats actually :) - Eg. http://www.denverpost.com/2012/07/03/gm-reconsiders-paid-facebook-advertising/ http://www.denverpost.com/2012/07/03/gm-reconsiders-paid-fac...

fumar 10y ago

Facebook is the least transparent ecosystem. As a marketer, I find it hard to invest dollars without being able to see or understand what percent of custom audiences are exposed to ads. For example, one can upload a file (list of emails) to a custom audience, lets say 1 M big, for FB to ingest. Voila your audience is active for targeting, but how many of those emails (users) will be targeted, who knows. FB's inventory is overpriced and untraceable.

jonknee 10y ago
Untraceable? You should buy a print ad and try to figure out if it was worthwhile!
- NicoJuicy 10y ago
  That's why you have coupons :)
  - Raphmedia 10y ago
    At work we all bring our coupons, stick them in a jar and everyone can pick the ones they need. You must hate us!
- fumar 10y ago
  If the digital landscape allows for transparent reporting to measure marketing's incremental lift or ROI, then that becomes the baseline. Facebook believes its inventory (users) are a cut above the rest, thus their opaque model. FB's advertising revenue is up 59% YOY, but that is not a clear signal growth will continue at the same clip. I foresee, digital marketers pushing back as marketing moves to a revenue generating business unit. Measurement becomes the backbone of all digital initiatives, can't measure FB as granular as display. Yes, you can't track traditional media's impact. At least not yet. Its the reason why digital marketing overall has been growing at ~30% YoY.
  - jonknee 10y ago
    Facebook provides plenty of conversion tracking features, if you can't figure out your ROI on FB advertising you're doing it wrong. There are obvious reasons why they wouldn't want to provide reports on what email addresses were marketed to (Google doesn't let you do that either...).

giarc 10y ago

Stock is down 1.8% at time of this comment... Did 166% net income jump not meet expectations?

the_watcher 10y ago
The whole market is down, which impacts them.
- deleted 10y ago
  [deleted]
meira 10y ago
I guess investors are having the same feelings people are showing here. This don't look like a healthy company, imho. Facebook mobile ads looks like scam to me, in both ends. You pay money to interact with the people you expent money and work to bring.
- SirensOfTitan 10y ago
  Both of your comments here have been composed of relatively strong opinions with nothing to back them up. Care to contribute anything to the discussion other than your potential bias?
  - meira 10y ago
    No, I dislike Facebook and this is enough for me to voice my opinion in a discussion, isn't? I'm not the kind that complain about free speech, but shouldn't you disagree and say why, if you want to, and not ask me to say more and only then your highness will evaluate? Come on, move to another comment if it bothers you but not enough to say something useful.
jonknee 10y ago
It was down 1.8% at the end of regular trading today (before the earnings call). It is down an additional 6.7% currently after bouncing around a bit--the conference call is not going well! You can see a chart of the after hours action by hitting "e" on the Google Finance chart (you may have to click on the chart first): https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=maximized&chdeh=0&chfdeh=0&chdet=1478123030266&chddm=391&chls=IntervalBasedLine&q=NASDAQ:FB&ntsp=0&ei=E14aWJnID6TKigKzxq64Bg https://www.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&...

taylorbuley 10y ago

I'm CTO at a local newspaper chain. I ran a seminar on how to digital advertising, then ran $500 in advertising to promote the event -- all as a test to see which advertising mediums I could use to get people to show up to learn about advertising. Here's the data and a summary: https://docs.google.com/spreadsheets/d/1DsJYUYETwQ7a-hISFPcCI7ojGtk2WtyGdxwQXSN6szQ/edit?usp=sharing https://docs.google.com/spreadsheets/d/1DsJYUYETwQ7a-hISFPcC... http://www.davisenterprise.com/special-projects/how-to-waste-less-money-doing-digital-advertising-next-time/ http://www.davisenterprise.com/special-projects/how-to-waste...

searine 10y ago
This is some incredible data. It's really refreshing to see someone share it.
NicoJuicy 10y ago
Nice summary, thanks for sharing!
rattray 10y ago
tldr?
- r00fus 10y ago
  Fta: "What the ROI chart says is that the return for the social ads was zero. They were a complete waste of money. They generated a lot of “action” but it was at best the wrong group of people, and at worst some type of fraud. This held true for facebook.com and its audience network. Ditto Google search ads, display ads and the Twitter campaign."
  - johnking 10y ago
    "Ditto Google search ads" checks article He spent less than $5 on Search ads... Hard to be drawing conclusions with that data set.
jackgolding 10y ago

ucha 10y ago

How did they go from paying an effective tax rate of around 40% between Q3-14 to Q4-15 to an tax rate of 25% this quarter? Notably, they had 2,557 MUSD in income in Q4-15 and paid 995 MUSD in taxes and this quarter they have a larger income of 3,169 MUSD but pay less in taxes, 790 MUSD. [0] [0] https://s21.q4cdn.com/399680738/files/doc_presentations/FB-Q316-Earnings-Slides.pdf https://s21.q4cdn.com/399680738/files/doc_presentations/FB-Q... - slide 22

jonknee 10y ago
It's a pretty meaningless number, they don't really pay that much in taxes. Their stock based compensation is artificially inflating it and that also explains the wild differences between quarters. http://qz.com/142032/why-is-facebooks-tax-rate-so-much-higher-than-its-competitors/ http://qz.com/142032/why-is-facebooks-tax-rate-so-much-highe... > Facebook pays its staff with stock options, and thanks to a quirk of tax law, Facebook end up with large costs that can be deducted later. The company issues options to executives and records their a rough estimate of their value in its earnings report. When the options are exercised and the executives purchase the stock, it has often increased in value beyond that estimate—and the company can deduct that new, higher value, even though it didn’t cost it any real cash.

radicaldreamer 10y ago

I think we've seen Facebook all-time-highs.

maverick_iceman 10y ago

Are they including tablet numbers in mobile?

debt 10y ago

lol snapchat is starting to sting

jpalomaki 10y ago

Might be interesting for Facebook to move from charging for ads to start getting their cut of successful sale. If they would crack this, there might be positive loop effect. Getting to know if users actually purchased something would give FB more data, which would allow better targeting. Implementation of course is not trivial. One way to make this work would be for Facebook to run the platform where purchase and payment takes place, like Amazon Marketplace.