10/24

6 Reasons Why Facebook’s Post-IPO Strategy is Working

With the positive news coming out of Facebook’s Q3 financial report yesterday, investors may finally be changing their tune on the social media powerhouse. Here are 6 points why I think we should be bullish on Facebook’s future:

 

Advertising Revenue Continues to Grow

In Q3, advertising revenue topped the $1 billion mark for the first time in the company’s history. As Facebook continues to experiment with new ad products for its over 1 billion users, we can expect this revenue to keep growing.
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Mobile Ads Are Performing Better Than Expected

Mark Zuckerberg also announced yesterday that mobile advertising now accounts for 14% of Facebook’s  revenue. Considering that Facebook didn’t offer mobile advertising just 6 short months ago, this is an encouraging sign for the company that got punished during its IPO for not having a solid mobile growth strategy.

 

Small Business to the Rescue

In addition, COO Sheryl Sandberg announced yesterday that the company is beginning to see revenue from a formerly free-to-use client base: small businesses. Sandberg revealed that 3% of the 8 million monthly active small businesses on Facebook tested the new ad product Promoted Posts25% of which had never used a Facebook ad product previously.

 

Localization Makes Management Easier for Global Brands

Management is also placing a large emphasis on increasing the value of the platform for international brands. Last week, the company announced a new feature that will allow companies to organize their worldwide presence on one Facebook page that is localized for each country. This change will allow global brands to more efficiently manage their international marketing strategy from one centralized page.

FB-Revenue

 

International Markets Producing More Revenue

The Q3 financial report also revealed that international revenue is growing. Year-over-year growth in Asia was 48%, compared to 17% in Europe and 66% in the rest of the world. Given that revenue from the U.S. is roughly equal to the rest of the international markets’ combined, there is still huge profit potential if Facebook can keep users around the world engaged on the platform.

 

Thinking Outside the Ad Box

Finally, Facebook has shown a great commitment to testing out new revenue-generating products in the midst of declining sales from gaming giant Zynga. A few weeks ago, the company launched a revitalized gift exchange in the hopes of stimulating user spending on the platform. My colleague Lauren Blecher also recently highlighted a new “want” feature that Facebook hopes will spur ecommerce revenue from the site.

With these recent updates, it’s no wonder that investors pushed Facebook’s stock price up 22% yesterday.  Are you as optimistic about Facebook’s future? Let us know in the comments.