Here's a thread with some charts based on Facebook's 2019 Q4 earnings that were released yesterday.
These first two charts highlights that the core $FB app hasn't grown much in North America over the past five years. This is important because...
These first two charts highlights that the core $FB app hasn't grown much in North America over the past five years. This is important because...
Facebook (the company) generates over 73% of its revenue in the US and Europe. Meanwhile, these countries only represent 29% of its the core Facebook app's user base. FB keeps the data close to its chest, but it's likely its other apps have a similar user / revenue breakdown.
Facebook's user / revenue dynamics lead to interesting charts like this: Facebook generates nearly all of its revenue in North America and Europe.
This is especially important considering that APAC and RoW include countries similar to the US/EU like Japan, Korea, Australia, etc.
This is especially important considering that APAC and RoW include countries similar to the US/EU like Japan, Korea, Australia, etc.
Despite North America and Europe comprising the majority of FB's revenue, they've also historically grown faster than other markets on that larger base.
Growth has dipped lately, which FB has attributed to its ad mix shifting from news feed to stories (has lower prices, for now)
Growth has dipped lately, which FB has attributed to its ad mix shifting from news feed to stories (has lower prices, for now)
FB flipped the switch on IG Stories ads in 2018.
The # of ads shown all FB properties was up 215% in 2019, and avg pricing was down 18% (due to newness of IG Stories)
I'm confident stories have a higher ad load than feed at scale, so FB is likely fine, for now.
The # of ads shown all FB properties was up 215% in 2019, and avg pricing was down 18% (due to newness of IG Stories)
I'm confident stories have a higher ad load than feed at scale, so FB is likely fine, for now.
Facebook recently rolled out a new "Family Daily Active People" metric, which is the average number of people who use any one of Facebook, Instagram, Messenger, or WhatsApp on either mobile or a web browser, on a given day (FB also explains its just a best-guess).
Facebook doesn't breakdown FDAP numbers by geography, but if you use it to calculate a rough all-in cost per user (Total Expenses + Total CapEX), and consider that APAC and RoW include some US-like markets, its clear Facebook generates all of its cash flow from developed markets.
App Annie data shows that time spent using TikTok in the US hit escape velocity in 2019, and is increasing exponentially.
I'm expecting total US time spent in TikTok to surpass Snapchat and Instagram in 2020; it could even surpass the core Facebook app.
I'm expecting total US time spent in TikTok to surpass Snapchat and Instagram in 2020; it could even surpass the core Facebook app.
Facebook's pricing power (and cash flow) could be in serious trouble if Bytedance is able to really ramp up its self-serve ad network.
The key will be: can TikTok age up and capture higher value video views from the core Facebook feed.
The key will be: can TikTok age up and capture higher value video views from the core Facebook feed.
Facebook has plenty of plans in payments, commerce, etc.
Its historically generated over 98% of revenue from advertising, so these could help Facebook monetize its emerging market users - but it will have to compete against Bytedance!
Something to keep a close eye on in 2020!
Its historically generated over 98% of revenue from advertising, so these could help Facebook monetize its emerging market users - but it will have to compete against Bytedance!
Something to keep a close eye on in 2020!
One last thing: Facebook also said it would switch to only reporting this new “Family User” metric.
Since there is no geographic or individual app breakdown, it will make it difficult for analysts to determine the health of Facebook’s core business!
Since there is no geographic or individual app breakdown, it will make it difficult for analysts to determine the health of Facebook’s core business!
Realized that this chart was unclear; this one is easier to understand!
