Six big questions re: Meta:
1) How much advertising revenue is Meta generating?
2) How much profit is Meta generating?
3) How did Meta turn this around so quickly?
4) How many people use Facebook every day?
5) What is going on with ad prices?
6) What share of time with social is video?
Big question #1: How much advertising revenue is Meta generating?
Meta advertising revenue (YoY growth):
1) 2015-Q3 – $4.3B
2) 2016-Q3 – $6.8B (↑ 59%)
3) 2017-Q3 – $10.1B (↑ 49%)
4) 2018-Q3 – $13.5B (↑ 33%)
5) 2019-Q3 – $17.4B (↑ 28%)
6) 2020-Q3 – $21.2B (↑ 22%)
7) 2021-Q3 – $28.3B (↑ 33%)
8) 2022-Q3 – $27.2B (↓ 4%)
9) 2023-Q3 – $33.6B (↑ 24%)
Meta advertising revenue per user in the U.S. and Canada (YoY growth):
1) 2021-Q3 – $52.34
2) 2022-Q3 – $49.13 (↓ 6%)
3) 2023-Q3 – $56.11 (↑ 14%)
Quote from Brian Wieser – Principal @ Madison and Wall:
“In the third quarter alone, the company added more than $6 billion in new quarterly ad revenue – or more than the annual revenue for any company below the industry’s top 10. The company will likely do it again in the fourth quarter given guidance implying similar growth in the current period.”
Podcast: Brian Wieser on the Dynamics of Media Buying
Big question #2: How much profit is Meta generating?
Meta profit (YoY growth):
1) 2015-Q3 – $900M
2) 2016-Q3 – $2.6B (↑ 194%)
3) 2017-Q3 – $4.7B (↑ 80%)
4) 2018-Q3 – $5.1B (↑ 9%)
5) 2019-Q3 – $6.1B (↑ 19%)
6) 2020-Q3 – $7.8B (↑ 29%)
7) 2021-Q3 – $9.2B (↑ 17%)
8) 2022-Q3 – $4.4B (↓ 52%)
9) 2023-Q3 – $11.6B (↑ 164%)
Take a bow, Zuck: Meta grew profit 164% YoY after a miserable Q3 last year.
Mr. Screens would like to recall this message: Last November, I wrote the following:
Flashback: Earnings Have Not Entered the Metaverse
Big question #3: How did Meta turn this around so quickly?
Quick answer: Lower costs (21K+ layoffs, etc.) combined with a $6B increase in quarterly revenue.
Smart take: Eric Franchi explained how Meta’s Advantage+ (AI media automation) accounted for close to 50% ($2.5B+) of Meta’s revenue increase.
Podcast: Gavin Dunaway talks fraudulent ads and AdMonsters. Plus a Freewheel update and earnings.
Quote from The Economist:
“It has been quite a year for Mark Zuckerberg. The co-founder of Facebook, a social-media Goliath now called Meta, is no stranger to public rebuke. But exactly a year ago even investors appeared to throw in the towel, accusing him of trashing the core business while lavishing money on his pharaonic dreams for the metaverse, a virtual world where he alone appeared to float in a deluded fantasy realm. On the day Meta issued weak third-quarter earnings last year, its share price fell by more than a fifth. Zuck’s name was mud.”
Big question #4: How many people use Facebook every day?
Meta daily active users in the U.S. & Canada (YoY growth):
1) 2015-Q3 – 167M
2) 2016-Q3 – 178M (↑ 7%)
3) 2017-Q3 – 185M (↑ 4%)
4) 2018-Q3 – 185M (↑ 0%)
5) 2019-Q3 – 189M (↑ 2%)
6) 2020-Q3 – 196M (↑ 4%)
7) 2021-Q3 – 196M (↑ 0%)
8) 2022-Q3 – 197M (↑ 1%)
9) 2023-Q3 – 203M (↑ 3%)
Big question #5: What is going on with ad prices?
Meta ad trends (YoY change) according to Mobile Dev Memo:
1) CPM – ↓ 6%
2) Total impressions – ↑ 31%
Bottom line: For ad impressions to grow 31%, with users (DAU) rising 3%, then ad load and/or time spent had to grow ≈ 27%. Most likely the ad load 🙂
Big question #6: What share of time with social is video?
Quick answer: 56%
