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If I'm reading their MAU charts correctly, they have way more MAU outside of the US than inside (82m vs 184m last quarter), not only that but international user
by pdovy 8y ago
If I'm reading their MAU charts correctly, they have way more MAU outside of the US than inside (82m vs 184m last quarter), not only that but international user growth is relatively strong compared to the US. That said, 94% of revenue last quarter was from the US, so they are not monetizing internationally really at all. If they can improve international monetization then there is a lot of room for revenue growth it would seem.
- hodder 8y ago"If they can improve international monetization then there is a lot of room for revenue growth it would seem." A universal truth in the social network space. Unfortunately, not even FB can really extract much value outside of North America.
- pdovy 8y agoYeah, if they can't pull that rabbit out of the hat, it looks a bit bleak. With US MAU's stalled for the last four quarters, they are faced with extracting more revenue from the same set of users - i.e., show everybody more ads and presumably water down the user experience in the process.
- dsl 8y ago> A universal truth in the social network space. In all of advertising. Non-US users remain extremely hard to monetize across the board.
- sharkweek 8y agoELI5 - are there any prevailing theories as to why this is?
- airstrike 8y agoFrom my Latin American perspective, I'd say it's due to way less disposable income in emerging markets and less of a consumerism mindset. America has the benefit of decades of intense consumerist propaganda to fend off the evil reds, while the biggest emerging markets are often very vocally against "Capitalism" (even if they would all love to own iPhones)
- GordonS 8y agoWhat about Europe, especially Western and Northern - plenty of disposable income to go round there?
- airstrike 8y agoNot really... wages suck and taxes are massive. They just have an absurd level of government welfare
- johannes1234321 8y agoEven though there are "absurd" levels health costs in Europe are lower than in the U.S. leading to higher life expectancy.
- mruts 8y agoMaybe, but America has relatively low taxes and high income. This is an anecdote, but I was looking at developer jobs in Europe and the salaries are pathetic. 65k Euros for a senior engineer with a 50% tax rate? Are you fucking kidding me? I can make 250k in the US at a 35% rate. It’s absurd. No wonder Europe has a brain drain problem...
- sonnyblarney 8y agoThe first-order issues are: a) Money. Most places do not have a lot of surplus wealth, and only a few places in Europe do. Consumers need to have extra money to spend on 'stuff' beyond the very basics, i.e. a consumer oriented economy for a lot of ads to work. b) Fragmentation. This is a two-sided problem. Most countries are very small, have their own laws, regs, and networks for everything that are very established. So the unit cost of marketing to advertisers etc. is going to be higher. And things move slower in most places. c) Behaviour. American culture is pop culture. Sometimes it's hard to explain that one. Americans move according to trends. Social mores change quickly depending on whoever has the biggest megaphone: news, broadcasters, even advertisers. It's a place where commercial interests drive aspiration, even morality - witness the amount of virtue signalling in ads, i.e. Nike's recent campaign etc. W. Europe, the other lucrative market - they are really traditional in their ways. They already have their day full of things to do. Germans leave work at 5 and go and drink a specific kind of beer at the local pub. They play certain kinds of sports. They buy certain things. In the UK, I've been to 'rich people's' homes and they have these ancient toasters. But they work! They don't just 'buy new stuff' it's not part of their culture. It's the same in most of the rest of the world. The rest of the world is really just not designed as a big commercial vehicle.
- nradov 8y agoI thought the EU eliminated most of the fragmentation in laws and regulations?
- acchow 8y agoThe more digital your business is the better able you are to monetize digital (and any) advertising. Digital advertising becomes more valuable the better you are able to track digital intents/impressions/sales through all your channels.
- nradov 8y agoThe EU advertising industry is only slightly smaller than in the US on a per-capita basis. So obviously those consumers are being monetized, otherwise businesses wouldn't be spending so much on advertising.
- acchow 8y agoUS vs. EU advertising spend is about $200bn vs. 100bn euros. On a per capita basis, that is $611/pp vs. 200 euros/pp. I wouldn't call that "only slightly smaller".
- pj_mukh 8y agoWhy is that?
- majani 8y agoI think you simply fail to recognize just how far ahead North America is from the rest of the world financially.
- aclsid 8y agoIf that was the case, then China would be the top market. This has more to do with the fact that Americans are used to pay for software at a personal level, something that not even Europe is fully used to.
- bigj0n 8y agoWhy would China be the top market? America has a far bigger GDP and several times larger GDP per capita
- deepVoid 8y ago"America has a far bigger GDP" It depends on how you calculate it. According to PPP, China has a GDP of 25 trillion vs the US of 20 trillion[1]. Yes, China has a bigger market and bigger GDP. If you calculate nominal GDP, China has ~14 trillion vs the US 20 trillion. US is bigger nominally, but not far bigger. [1] https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
- why_only_15 8y agoIn the context of talking about how much money you can earn from international markets, PPP doesn't matter.
- mruts 8y agoPPP isn’t at all relevant in this discussion. People like to just bring up PPP like it’s magic, but it’s not. You have to understand the situations in which PPP is relevant and the situations in which it means nothing at all. Moreover, you have to understand why PPP exists in the first place. Let me give you a hint: it has to do with arbitrage.
- dvfjsdhgfv 8y ago> Unfortunately, not even FB can really extract much value outside of North America. Unfortunately for whom?
- filoleg 8y agoFor companies that are trying to monetize outside of North America.
- walterstucco 8y agoThat's a good thing IMO
- dvfjsdhgfv 8y agoThat may be unfortunate for FB, but very fortunate for the citizens of these countries.
- filoleg 8y agoHow is it fortunate for citizens of those countries? If the company monetizes, but in ways that the citizens don't like, they can choose to not use services provided by the company. If they agree with the monetization practices being adequate in exchange for the services provided, they can use the services. Whereas if the company doesn't monetize in the region, they can't afford to provide services anymore, then even those people who are totally cool with the monetization strategy cannot use the services. TL;DR: if you don't agree with the way a service is monetized, you are free to not use it (obvious limitations apply for things that are essential to living in modern society, like internet or banking; FB doesn't fall under this). Just because you are not ok with the cost associated with using that service, that shouldn't serve as a solid ground for denying service to those people who accept the cost.
- chubot 8y agoIs that true? What about Europe? I thought that Europeans have similar behavior to Americans as far as the Internet goes. For example, about 10 years ago, Google higher market share in Europe than in America. It was something like 95% in Europe and 90% in the US. I wouldn't be surprised if that's still the case. Of course Google's not a social network, but my very limited understanding says that Internet products generally translate well from America to Europe. I'd be interested to know where that's not true!
- sercand 8y agoAdvertising on Pinterest is really tough. Their system is buggy and paying for the ad nearly impossible internationally, last time I checked. Due to these reasons, we put our all ads into Facebook instead of splitting some to Pinterest a couple of months ago.