Below are the highlights of Facebook’s Q4 results:
Revenue continues to grow:
- Revenue for the full year 2014 was $12.47 billion, an increase of 58 percent year-over-year.
- Revenue for the fourth quarter of 2014 totaled $3.85 billion, an increase of 49 percent, compared with $2.59 billion in the fourth quarter of 2013.
- Revenue from advertising was $3.59 billion, a 53 percent increase from the same quarter last year. Excluding the impact of year-over-year changes in foreign exchange rates, revenue from advertising would have increased by 58 percent.
- Mobile advertising revenue represented approximately 69 percent of advertising revenue and grew 99 percent since Q4 2013.
People using Facebook continues to grow:
- Daily active users (DAUs) were 890 million on average for December 2014, an increase of 18 percent year-over-year.
- Mobile DAUs were 745 million on average for December 2014, an increase of 34 percent year-over-year.
- Monthly active users (MAUs) were 1.39 billion as of December 31, 2014, an increase of 13 percent year-over-year.
- Mobile MAUs were 1.19 billion as of December 31, 2014, an increase of 26 percent year-over-year.
- 64 percent of our 1.39 billion users came back to Facebook every day
With regards to how people are using Facebook now, Mark Zuckerberg says, “One interesting sign of our continued growth in engagement is through our progress on visual and public content. More than 2 billion photos are now shared daily on Facebook, Instagram, Messenger and WhatsApp. Video also grew significantly this year, with an average of more than 3 billion video views daily on Facebook. And there are now more than two billion interactions every week on Facebook between public figures and their fans.”
In terms of advertising priorities, below are the key points:
Capitalizing on the shift to mobile:
Video saw a dramatic growth on Facebook in 2014 especially around global events such as the World Cup and the ALS Ice Bucket Challenge. This growth was evidenced by the number of video posts person on Facebook increasing by 75 percent globally and 94 percent in the US, within just one year. Currently, over 50 percent of people in the US who come to Facebook daily watch at least one video per day.
Interestingly, 65 percent of Facebook video views globally occur on mobile. This growth coupled with Facebook’s introduction of autoplay video ads, has led marketers and brands to use videos more creatively.
Besides video, Facebook capitalized on the shift to mobile through Instgram too. In Q4 2014, Facebook rolled out Instagram ads in Australia and Canada. One of the first Instagram video advertisers, Banana Republic developed a series of videos to promote its new BR clothing line; The videos showed fashion sketches from the new collection and drove a 23-point lift in ad recall.
Growing the number of marketers using ads products:
Facebook simplified the process of planning ad campaigns for businesses of all sizes and to use its targeting tools for small business through its tools “Custom Audiences” and “Conversion Tracking”. Travel company Thomas Cook used custom audiences in Belgium to target past customers with travel destinations they’d expressed interest in.
Making ads more relevant:
Facebook made significant investments in both, its core measurement and targeting tools as well as Ad Tech. Earlier in 2014, it introduced ad buying capabilities based on reach and frequency metrics, which is similar to how brand marketers buy TV ads and therefore enables better cross-comparison. It also improved its Ads Manager product to give better insights into ad campaign’s audience and impact, while re-launching Atlas to help marketers reach real people and measure results across multiple devices, and partnered with Omnicom and Havas to further expand globally. The tech giant also invested in something called, Audience Network, which helps marketers extend their campaigns off of Facebook, and LiveRail, which provides publishers with video tools to monetize their inventory more efficiently
Sheryl Sandberg, COO, Facebook highlighted what’s ahead in her remarks: “Heading into 2015, we are excited to build on the progress we’ve made with our core ad products, as well as with newer areas like video, Instagram and ad tech. It’s still early days in all of these efforts. There is a lot of hard work to do, and we plan to invest aggressively.”
She also said that Facebook’s “ultimate goal is to be a critical business partner to our clients – providing people-based marketing at scale to build their brands and move their products off shelves.”
