Facebook released first quarter financial information and Wall Street is buzzing. The company nearly tripled profit on a 72% increase in revenue in its first quarter, with profits increasing to $642 million from $219 million a year earlier. Its revenue climbed to $2.5 billion, up from $1.46 billion in the same period last year. Seems like just two years ago the company was generating losses. Chief Operating Officer Sheryl Sandberg said in an interview, "What has really changed for us in the past year or two is that we are now a large and increasingly important part of what you have to do if you're running a business."
The Q1 Report Methodology
This financial information released by Facebook appears to fall in line with the recently released Adobe Q1 Social Intelligence Report released last Monday. Adobe's Report focuses on the three legs of the stool written about often in this blog and examines data trends for: 1) Paid 2) Earned and 3) Owned digital media. This report is based on aggregated and anonymous data from retail, media, entertainment and travel sites, and was gleaned from data Adobe amassed through its Adobe Marketing Cloud Solutions: Adobe Media Optimizer, Adobe Analytics, and Adobe Social. Joe Martin, Senior Analyst, Adobe Digital Index told me the Digital Index seeks to put out regular insights on different industries - everywhere that Adobe's data gives it access to and Adobe is "Capturing every 6 out of 10 dollars spent online." The Q1 analysis is based on:
- 260 billion Facebook ad impressions
- 226 billion Facebook post impressions
- 17 billion referred visits from social networking sites
- 7 billion brand engagements on Facebook (comments, shares and likes)
Four key findings can be pulled from the extensive work that went into this report.
Expect Continued Growth For Facebook's Ad Business
In Paid Social, it was interesting to see Facebook ad click through rates are up 20% quarter over quarter. This is surprising because Q4 is usually so busy because of the holiday season. Martin commented that "Either marketers are adding more to their media mix or more brands are jumping on and trying out Facebook ads and they're being rewarded with higher click through rates while the cost per click rates dropped."
- Facebook revenue per visit relates to quality of traffic (a visit that results in revenue)
- Facebook edged up in Q1 which, again, is unusual because these revenue numbers are generally subject to seasonality as evidenced by the other social platforms like Twitter, Tumblr and Pinterest's numbers dipping slightly in Q1.
Martin also commented that social doesn't always get the attribution it's entitled to because people don't always make a purchase right away. It's often the case that a consumer sees a Facebook ad, clicks on it, then does his / her research and purchases the product a day or two later by going directly to the site where the product is located instead of clicking through the ad again.
Paid Social: Facebook Ad CTRs & CPCs
- Facebook ad CTR is up 160% year-over-year and 20% quarter-over-quarter
- Facebook ad CPC is down 2% year-over-year and down 11% quarter-over-quarter
- Facebook ad impressions are up 40% year-over-year and 41% quarter-over-quarter
Owned Social: Revenue per Visit (RPV) & Social Referrals
- LinkedIn refers the second highest amount of social traffic to B2B High Tech sites. Revenue per visit (RPV) from Tumblr is up 55% year-over-year but down 36% quarter-over-quarter
- Referred RPV only increased for Facebook QoQ, down for Twitter and Tumblr:
- Facebook: Up 2% QoQ (up 11% YoY)
- Twitter: Down 23% QoQ (up 5% YoY)
- Tumblr: Down 36% QoQ (up 55% YoY)
Social referred most traffic to Media and Entertainment sites in Q1 (7.9%). Social referred traffic to retail was down 25% YoY. LinkedIn drove 15% of social traffic to B2B high-tech sites; second only to FB (52%). Facebook produced 75% of traffic to retail sites (up 13% QoQ, 2% YoY), while Pinterest referred traffic to retail sites down 56% QoQ (up 59% YoY).
Earned/Organic Social: Engagement on Facebook
- ¼ of videos played on Facebook occur on Fridays
- 15.7% of Facebook post impressions happen on Fridays
Strong growth for link, video posts:
- Video ad and post replays increased 134% QoQ (785% YoY)
- Engagement with video posts up 58% QoQ (25% YoY)
- Text-only posts lose share and engagement. Posts with links up 167 QoQ (77% YoY)
- Most social impressions (15.7%) happen on Fridays
- Highest engagement rate
- Nearly 25% of all video plays occur
Casual Friday's are becoming "Social Media Fridays." Facebook continues to dominate the social realm, but each social site has a unique audience and route that can lead to more loyal fans, brand awareness, and eventual revenue.
What's It All Mean To Business Owners?
So, what should business owners take away from Adobe's Q1 Report?
- Give LinkedIn a little love. When looking at B2B traffic they are driving the second highest and they are becoming a content provider in that space
- Text posts are becoming irrelevant. Text only posts, according to Facebook, are being shown hardly at all in favor of links, images and video.
- Businesses must focus on media rich content. Even though the cost to produce this content is higher, it must be part of the mix.
- Keep using those images as well
Mr. Martin said the data indicated "Facebook continues to improve their way of targeting ads and adding social context to ads. And, while Facebook is competing with LinkedIn in the B2B market, there is definitely space for both." He also indicated there's plenty of room for the other social networks (Twitter, Pinterest, etc.) to thrive. The report concludes:
Social networks will continue to make changes to entice marketers to invest in brand pages, advertising, and overall social strategies. To get the most out of social media investments, marketers will need to adapt to frequent algorithm changes and should look to make more pinpointed investments into targeting and management of social media ad and post spends.
The message continues to be what we are telling our clients and prospects. Business owners need an online marketing strategy and it needs to include inbound and social media marketing.