Author Topic: FB - Facebook  (Read 210727 times)

Shooter MacGavin

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Re: FB - Facebook
« Reply #880 on: December 10, 2018, 06:36:04 PM »
Updated list of reasons to short FB from previous posts (nkp007 & Spekulatius):

 
2) Ads are very economically sensitive, so in downturn, revenue will evaporate quickly
http://resources.emartin.net/blog/pic/SAI-US-Ad-Spending-2009-vs-2008.jpg
https://www.statista.com/chart/12136/worldwide-digital-and-tv-ad-spending/

 Digital ads grew right through the great recession.  In fact a perverse thing happened then to Google (from memory, I'm too lazy to check the transcripts). Advertisers that could afford to stepped up buying more keywords more aggressively on Google/Yahoo/Bing and others because it was far cheaper than TV/print etc and it converted and/or reached very well and the advertisers needed the sales so were willing to accept lesser ROIs. I would argue today Facebook has better data and therefore reach than Google, and lower pricing per impression, though not higher intent. 
« Last Edit: December 10, 2018, 06:37:36 PM by Shooter MacGavin »


bizaro86

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Re: FB - Facebook
« Reply #881 on: December 10, 2018, 09:24:03 PM »
I think the risk to advertising revenue is more that a certain  percentage of recent growth has been from non-economic venture funded startups spending their VC money on ads. If VC capital is in a bubble, how much spending on FB ads evaporates if it bursts?

johnny

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Re: FB - Facebook
« Reply #882 on: December 10, 2018, 09:28:17 PM »
I don't think that first chart proves what we'd like it to prove. Online advertising was still so immature in 08/09 that it's not surprising that share growth overwhelmed the industry headwinds.

Once online has a "mature" share of the ad dollar, we're in a different world. That doesn't mean it loses revenue 1:1 with the industry in a downturn, but I'd wager the outcome is closer to that than impervious.

Beyond that, FB's core advertising product didn't even exist in 08/09. I'm not surprised that the bids for mesothelioma and abogados accidentes stayed strong in a recession, but if FB's mobile in-newsfeed product is dominated by things much higher on the maslow hierarchy, there's still reason to be apprehensive.

That said, FB is so conservatively capitalized, a bloodbath in advertising may actually give it acquisition opportunities that more than make up for the temporary earnings hit.

MrB

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Re: FB - Facebook
« Reply #883 on: December 11, 2018, 01:43:42 AM »
I think the risk to advertising revenue is more that a certain  percentage of recent growth has been from non-economic venture funded startups spending their VC money on ads. If VC capital is in a bubble, how much spending on FB ads evaporates if it bursts?
The following will suggest more a concern on the margins
https://www.healthnutnews.com/the-35-biggest-advertisers-on-facebook/
Also has not changed much since 2013
https://www.businessinsider.com/top-advertisers-on-facebook-2013-11?r=US&IR=T

MrB

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Re: FB - Facebook
« Reply #884 on: December 11, 2018, 02:52:02 AM »
I don't think that first chart proves what we'd like it to prove. Online advertising was still so immature in 08/09 that it's not surprising that share growth overwhelmed the industry headwinds.

Once online has a "mature" share of the ad dollar, we're in a different world. That doesn't mean it loses revenue 1:1 with the industry in a downturn, but I'd wager the outcome is closer to that than impervious.

Beyond that, FB's core advertising product didn't even exist in 08/09. I'm not surprised that the bids for mesothelioma and abogados accidentes stayed strong in a recession, but if FB's mobile in-newsfeed product is dominated by things much higher on the maslow hierarchy, there's still reason to be apprehensive.

That said, FB is so conservatively capitalized, a bloodbath in advertising may actually give it acquisition opportunities that more than make up for the temporary earnings hit.
Fair comment. Wonder what "maturity" looks like. Could be close.
https://www.appnexus.com/sites/default/files/whitepapers/guide-2018stats_2.pdf

Spekulatius

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Re: FB - Facebook
« Reply #885 on: December 11, 2018, 04:12:48 AM »
Hmm, I am getting ads for IBM cloud, credit card offers, checking accounts from Facebook and I am not interested in any of these things right now. Sometimes, I donít see any ads at all when on Facebook. I actually feel the targeting could be way better.
To be a realist, one has to believe in miracles.

exege

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Re: FB - Facebook
« Reply #886 on: December 11, 2018, 05:12:38 AM »
In terms of targeting, it is determined as much by the advertiser's inputs as Facebook's algos. If the advertiser wants to target ads to college educated males, age 35-55, in Kansas City, and try to sell them flower arranging lessons, Facebook will gladly take their money.