Author Topic: FB - Facebook  (Read 176946 times)

longinvestor

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Re: FB - Facebook
« Reply #580 on: April 09, 2018, 08:22:33 AM »
It's absolutely mind blowing that so many people here (and everywhere else) are so tunnel-visioned on recent events and the potential for regulation of Facebook, yet no one is actually discussing the core business trends.

Take regulation, cambridge analytica, user privacy, etc all out of the picture, and look at the core business.

1) The company has put up extremly high growth numbers over the past few years. First, via increasing ad loads. Second, via increasing pricing. This is a trend that is not sustainable, and sooner rather than later will impact advertiser ROIs negatively. This is antithetical to the typical idea of a "quality business" like Amazon or Google, who typically extract cost advantages from their scale and then pass that on to the customer in the form of lower pricing. Instead, Facebook extracts growth at the expense of their customers rather than passing the benefits along.

2) Engagement rates are the absolute most important metric to measure the health of the Facebook platform. Facebook wants users to engage as frequently as possible, and to increase their engagements over time. Engagement drives everything - the audience size, the effectiveness of their ad targeting algos, etc. Engagement declined last quarter for the first time ever, both in the sense of DAUs/MAUs and in the sense of total minutes per user on the platform, and indications are that trend is continuing.

3) Consensus estimates appear WAY too high. The global digital advertising market is expected to grow 13% to $198B this year. FB is estimated to grow their advertising revenues 37% from $39.9B to $54.6B. So consensus estimates expect Facebook to capture 60% to 70% of ALL incremental digital spend across the entire world AFTER they've spent two years first maxing out their ad loads and then pushing pricing to a tipping point. (h/t @fullysynergized for tweeting some of those metrics out). That seems ridiculous to me, especially because you now have Amazon ramping their advertising platform off a very low base, and over 75% of advertisers currently spend ZERO dollars on Amazon's advertising platform. I'm extremely skeptical they'll be able to come anywhere close to consensus numbers, unless they find a way to self-inflict more damage to their competitive position simply for the sake of growth.

I have no position in FB - but considering the above, I just find it pretty unbelievable that people are so myopically focused on the cambridge analytica stuff and using it as air cover to justify being max long FB - yet no one seems to be actually looking at the core business.
The global ad business is around $500 billion.

What no one is talking about the effectiveness of the ads. Meaning target customers actually becoming customers. For example some mention here about WhatsApp as a potential monetizing route. The vast majority of people using Whatsapp likely never will buy anything advertised to them. If another “free” platform emerges that is where they’ll move to.


Liberty

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Re: FB - Facebook
« Reply #581 on: April 09, 2018, 08:39:36 AM »
It's absolutely mind blowing that so many people here (and everywhere else) are so tunnel-visioned on recent events and the potential for regulation of Facebook, yet no one is actually discussing the core business trends.

Take regulation, cambridge analytica, user privacy, etc all out of the picture, and look at the core business.

1) The company has put up extremly high growth numbers over the past few years. First, via increasing ad loads. Second, via increasing pricing. This is a trend that is not sustainable, and sooner rather than later will impact advertiser ROIs negatively. This is antithetical to the typical idea of a "quality business" like Amazon or Google, who typically extract cost advantages from their scale and then pass that on to the customer in the form of lower pricing. Instead, Facebook extracts growth at the expense of their customers rather than passing the benefits along.

As FB's ad tech improves, ROIs improve too. Through the auction mechanism , when inventory supply doesn't go up, prices do (FB doesn't set prices, it uses the same kind of auction as Google does). But it's possible for prices to go up slower than ROIs and to still have an improving competitive position. You can't judge from pricing alone. In the end, the only thing that matters to advertisers is ROI, and it seems to be doing well there:

https://twitter.com/JerryCap/status/979104232572891140



Quote
2) Engagement rates are the absolute most important metric to measure the health of the Facebook platform. Facebook wants users to engage as frequently as possible, and to increase their engagements over time. Engagement drives everything - the audience size, the effectiveness of their ad targeting algos, etc. Engagement declined last quarter for the first time ever, both in the sense of DAUs/MAUs and in the sense of total minutes per user on the platform, and indications are that trend is continuing.

They changed their algo to favor certain kind of interactions over others (friends & family over videos). Of course videos will give you more time on the platform, but the quality of the engagement is lower.

Quote
3) Consensus estimates appear WAY too high. The global digital advertising market is expected to grow 13% to $198B this year. FB is estimated to grow their advertising revenues 37% from $39.9B to $54.6B. So consensus estimates expect Facebook to capture 60% to 70% of ALL incremental digital spend across the entire world AFTER they've spent two years first maxing out their ad loads and then pushing pricing to a tipping point. (h/t @fullysynergized for tweeting some of those metrics out). That seems ridiculous to me, especially because you now have Amazon ramping their advertising platform off a very low base, and over 75% of advertisers currently spend ZERO dollars on Amazon's advertising platform. I'm extremely skeptical they'll be able to come anywhere close to consensus numbers, unless they find a way to self-inflict more damage to their competitive position simply for the sake of growth.

I think the advertising pie is being expanded by a lot of these moves. A lot of small businesses that might not have advertised on TV or in print can now advertise on platforms like FB and Google, and now Amazon. It's the whole advertising pie, globally, that you have to look at, don't split between digital and non-digital. It's all competing together, and it's clear who's out-competing who. ARPUs are very low outside NA and Europe, and I think they'll keep going up at a decent clip at the global middle class keeps emerging and advertising in those regions become more sophisticated.

On top of that, how are you valuing Instagram, Whatsapp, and Messenger?
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Liberty

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Re: FB - Facebook
« Reply #583 on: April 09, 2018, 09:02:00 AM »
It's absolutely mind blowing that so many people here (and everywhere else) are so tunnel-visioned on recent events and the potential for regulation of Facebook, yet no one is actually discussing the core business trends.

Take regulation, cambridge analytica, user privacy, etc all out of the picture, and look at the core business.

1) The company has put up extremly high growth numbers over the past few years. First, via increasing ad loads. Second, via increasing pricing. This is a trend that is not sustainable, and sooner rather than later will impact advertiser ROIs negatively. This is antithetical to the typical idea of a "quality business" like Amazon or Google, who typically extract cost advantages from their scale and then pass that on to the customer in the form of lower pricing. Instead, Facebook extracts growth at the expense of their customers rather than passing the benefits along.

2) Engagement rates are the absolute most important metric to measure the health of the Facebook platform. Facebook wants users to engage as frequently as possible, and to increase their engagements over time. Engagement drives everything - the audience size, the effectiveness of their ad targeting algos, etc. Engagement declined last quarter for the first time ever, both in the sense of DAUs/MAUs and in the sense of total minutes per user on the platform, and indications are that trend is continuing.

3) Consensus estimates appear WAY too high. The global digital advertising market is expected to grow 13% to $198B this year. FB is estimated to grow their advertising revenues 37% from $39.9B to $54.6B. So consensus estimates expect Facebook to capture 60% to 70% of ALL incremental digital spend across the entire world AFTER they've spent two years first maxing out their ad loads and then pushing pricing to a tipping point. (h/t @fullysynergized for tweeting some of those metrics out). That seems ridiculous to me, especially because you now have Amazon ramping their advertising platform off a very low base, and over 75% of advertisers currently spend ZERO dollars on Amazon's advertising platform. I'm extremely skeptical they'll be able to come anywhere close to consensus numbers, unless they find a way to self-inflict more damage to their competitive position simply for the sake of growth.

I have no position in FB - but considering the above, I just find it pretty unbelievable that people are so myopically focused on the cambridge analytica stuff and using it as air cover to justify being max long FB - yet no one seems to be actually looking at the core business.
The global ad business is around $500 billion.

What no one is talking about the effectiveness of the ads. Meaning target customers actually becoming customers. For example some mention here about WhatsApp as a potential monetizing route. The vast majority of people using Whatsapp likely never will buy anything advertised to them. If another “free” platform emerges that is where they’ll move to.

Just on the point of Whatsapp as 'sticky', no I don't think customers will just leave to another platform. Even my parents are slowly moving away from 'normal' text messaging and towards Whatsapp. This is huge! We will still be using Whatsapp for a very long time...

rohitc99

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Re: FB - Facebook
« Reply #584 on: April 09, 2018, 09:50:17 AM »
It's absolutely mind blowing that so many people here (and everywhere else) are so tunnel-visioned on recent events and the potential for regulation of Facebook, yet no one is actually discussing the core business trends.

Take regulation, cambridge analytica, user privacy, etc all out of the picture, and look at the core business.

1) The company has put up extremly high growth numbers over the past few years. First, via increasing ad loads. Second, via increasing pricing. This is a trend that is not sustainable, and sooner rather than later will impact advertiser ROIs negatively. This is antithetical to the typical idea of a "quality business" like Amazon or Google, who typically extract cost advantages from their scale and then pass that on to the customer in the form of lower pricing. Instead, Facebook extracts growth at the expense of their customers rather than passing the benefits along.

2) Engagement rates are the absolute most important metric to measure the health of the Facebook platform. Facebook wants users to engage as frequently as possible, and to increase their engagements over time. Engagement drives everything - the audience size, the effectiveness of their ad targeting algos, etc. Engagement declined last quarter for the first time ever, both in the sense of DAUs/MAUs and in the sense of total minutes per user on the platform, and indications are that trend is continuing.

3) Consensus estimates appear WAY too high. The global digital advertising market is expected to grow 13% to $198B this year. FB is estimated to grow their advertising revenues 37% from $39.9B to $54.6B. So consensus estimates expect Facebook to capture 60% to 70% of ALL incremental digital spend across the entire world AFTER they've spent two years first maxing out their ad loads and then pushing pricing to a tipping point. (h/t @fullysynergized for tweeting some of those metrics out). That seems ridiculous to me, especially because you now have Amazon ramping their advertising platform off a very low base, and over 75% of advertisers currently spend ZERO dollars on Amazon's advertising platform. I'm extremely skeptical they'll be able to come anywhere close to consensus numbers, unless they find a way to self-inflict more damage to their competitive position simply for the sake of growth.

I have no position in FB - but considering the above, I just find it pretty unbelievable that people are so myopically focused on the cambridge analytica stuff and using it as air cover to justify being max long FB - yet no one seems to be actually looking at the core business.
The global ad business is around $500 billion.

What no one is talking about the effectiveness of the ads. Meaning target customers actually becoming customers. For example some mention here about WhatsApp as a potential monetizing route. The vast majority of people using Whatsapp likely never will buy anything advertised to them. If another “free” platform emerges that is where they’ll move to.

Just on the point of Whatsapp as 'sticky', no I don't think customers will just leave to another platform. Even my parents are slowly moving away from 'normal' text messaging and towards Whatsapp. This is huge! We will still be using Whatsapp for a very long time...

In NA, we under-estimate how embedded whatsapp is. in india its a defacto communication channel now. its used to make calls with data rates dropping ( 10 dollars for 80 Gb), conduct business etc. I use it to keep in touch with family and friends. i cannot think of what will make everyone move to something else for some time. the penetration for whatsapp is only increasing with mobile penetration going up

cameronfen

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Re: FB - Facebook
« Reply #585 on: April 09, 2018, 10:50:31 AM »
It's absolutely mind blowing that so many people here (and everywhere else) are so tunnel-visioned on recent events and the potential for regulation of Facebook, yet no one is actually discussing the core business trends.

Take regulation, cambridge analytica, user privacy, etc all out of the picture, and look at the core business.

1) The company has put up extremly high growth numbers over the past few years. First, via increasing ad loads. Second, via increasing pricing. This is a trend that is not sustainable, and sooner rather than later will impact advertiser ROIs negatively. This is antithetical to the typical idea of a "quality business" like Amazon or Google, who typically extract cost advantages from their scale and then pass that on to the customer in the form of lower pricing. Instead, Facebook extracts growth at the expense of their customers rather than passing the benefits along.

2) Engagement rates are the absolute most important metric to measure the health of the Facebook platform. Facebook wants users to engage as frequently as possible, and to increase their engagements over time. Engagement drives everything - the audience size, the effectiveness of their ad targeting algos, etc. Engagement declined last quarter for the first time ever, both in the sense of DAUs/MAUs and in the sense of total minutes per user on the platform, and indications are that trend is continuing.

3) Consensus estimates appear WAY too high. The global digital advertising market is expected to grow 13% to $198B this year. FB is estimated to grow their advertising revenues 37% from $39.9B to $54.6B. So consensus estimates expect Facebook to capture 60% to 70% of ALL incremental digital spend across the entire world AFTER they've spent two years first maxing out their ad loads and then pushing pricing to a tipping point. (h/t @fullysynergized for tweeting some of those metrics out). That seems ridiculous to me, especially because you now have Amazon ramping their advertising platform off a very low base, and over 75% of advertisers currently spend ZERO dollars on Amazon's advertising platform. I'm extremely skeptical they'll be able to come anywhere close to consensus numbers, unless they find a way to self-inflict more damage to their competitive position simply for the sake of growth.

I have no position in FB - but considering the above, I just find it pretty unbelievable that people are so myopically focused on the cambridge analytica stuff and using it as air cover to justify being max long FB - yet no one seems to be actually looking at the core business.
The global ad business is around $500 billion.

What no one is talking about the effectiveness of the ads. Meaning target customers actually becoming customers. For example some mention here about WhatsApp as a potential monetizing route. The vast majority of people using Whatsapp likely never will buy anything advertised to them. If another “free” platform emerges that is where they’ll move to.

Just on the point of Whatsapp as 'sticky', no I don't think customers will just leave to another platform. Even my parents are slowly moving away from 'normal' text messaging and towards Whatsapp. This is huge! We will still be using Whatsapp for a very long time...

In NA, we under-estimate how embedded whatsapp is. in india its a defacto communication channel now. its used to make calls with data rates dropping ( 10 dollars for 80 Gb), conduct business etc. I use it to keep in touch with family and friends. i cannot think of what will make everyone move to something else for some time. the penetration for whatsapp is only increasing with mobile penetration going up

I mentioned Whatsapp before on this thread which may be the post you were referring too.  Whatsapp benefits from the same network effects (i.e. moat) that Facebook have, the more people have Whatsapp the harder it is for you to leave to some other messaging company.  Thus Facebooks Stratagy of increasing users and not monetizing right now is the correct strategy IMO.  Whatsapp already has 50% more MAU than Wechat, and is the dominant player in India and most African/South American countries (along with Facebook Messenger).   No one is going to move from Whatsapp to another service if they start serving monetizing because all your friends are on Whatsapp.  Thus, even if it would be beneficial for everyone to move you have a coordination problem which stops it from happening.  This is the moat for both Facebook and Whatsapp. 

cameronfen

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Re: FB - Facebook
« Reply #586 on: April 09, 2018, 10:58:06 AM »
It's absolutely mind blowing that so many people here (and everywhere else) are so tunnel-visioned on recent events and the potential for regulation of Facebook, yet no one is actually discussing the core business trends.

Take regulation, cambridge analytica, user privacy, etc all out of the picture, and look at the core business.

1) The company has put up extremly high growth numbers over the past few years. First, via increasing ad loads. Second, via increasing pricing. This is a trend that is not sustainable, and sooner rather than later will impact advertiser ROIs negatively. This is antithetical to the typical idea of a "quality business" like Amazon or Google, who typically extract cost advantages from their scale and then pass that on to the customer in the form of lower pricing. Instead, Facebook extracts growth at the expense of their customers rather than passing the benefits along.

2) Engagement rates are the absolute most important metric to measure the health of the Facebook platform. Facebook wants users to engage as frequently as possible, and to increase their engagements over time. Engagement drives everything - the audience size, the effectiveness of their ad targeting algos, etc. Engagement declined last quarter for the first time ever, both in the sense of DAUs/MAUs and in the sense of total minutes per user on the platform, and indications are that trend is continuing.

3) Consensus estimates appear WAY too high. The global digital advertising market is expected to grow 13% to $198B this year. FB is estimated to grow their advertising revenues 37% from $39.9B to $54.6B. So consensus estimates expect Facebook to capture 60% to 70% of ALL incremental digital spend across the entire world AFTER they've spent two years first maxing out their ad loads and then pushing pricing to a tipping point. (h/t @fullysynergized for tweeting some of those metrics out). That seems ridiculous to me, especially because you now have Amazon ramping their advertising platform off a very low base, and over 75% of advertisers currently spend ZERO dollars on Amazon's advertising platform. I'm extremely skeptical they'll be able to come anywhere close to consensus numbers, unless they find a way to self-inflict more damage to their competitive position simply for the sake of growth.

I have no position in FB - but considering the above, I just find it pretty unbelievable that people are so myopically focused on the cambridge analytica stuff and using it as air cover to justify being max long FB - yet no one seems to be actually looking at the core business.

To respond to all your points for Facebook, it doesn't matter that engagement in US trends down slightly or the global advertising market is going to grow slower than trend, or that monetization will slow growth, what matters is North America has an ARPU of $26, while Europe is at $9, and developing countries are at $2.  All those risks you highlight (all developed country problems) could be mild headwinds (no one I think is saying that ARPU or users will drop more than a couple of percent a year at the worst) but if ARPU and MAU in developing countries (which is the majority of FB users) catches up to Europe or North America over the next 10-20 years, you should make a lot of money even if all those things you say are true. 

philly value

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Re: FB - Facebook
« Reply #587 on: April 09, 2018, 12:02:55 PM »
It's absolutely mind blowing that so many people here (and everywhere else) are so tunnel-visioned on recent events and the potential for regulation of Facebook, yet no one is actually discussing the core business trends.

Take regulation, cambridge analytica, user privacy, etc all out of the picture, and look at the core business.

1) The company has put up extremly high growth numbers over the past few years. First, via increasing ad loads. Second, via increasing pricing. This is a trend that is not sustainable, and sooner rather than later will impact advertiser ROIs negatively. This is antithetical to the typical idea of a "quality business" like Amazon or Google, who typically extract cost advantages from their scale and then pass that on to the customer in the form of lower pricing. Instead, Facebook extracts growth at the expense of their customers rather than passing the benefits along.

2) Engagement rates are the absolute most important metric to measure the health of the Facebook platform. Facebook wants users to engage as frequently as possible, and to increase their engagements over time. Engagement drives everything - the audience size, the effectiveness of their ad targeting algos, etc. Engagement declined last quarter for the first time ever, both in the sense of DAUs/MAUs and in the sense of total minutes per user on the platform, and indications are that trend is continuing.

3) Consensus estimates appear WAY too high. The global digital advertising market is expected to grow 13% to $198B this year. FB is estimated to grow their advertising revenues 37% from $39.9B to $54.6B. So consensus estimates expect Facebook to capture 60% to 70% of ALL incremental digital spend across the entire world AFTER they've spent two years first maxing out their ad loads and then pushing pricing to a tipping point. (h/t @fullysynergized for tweeting some of those metrics out). That seems ridiculous to me, especially because you now have Amazon ramping their advertising platform off a very low base, and over 75% of advertisers currently spend ZERO dollars on Amazon's advertising platform. I'm extremely skeptical they'll be able to come anywhere close to consensus numbers, unless they find a way to self-inflict more damage to their competitive position simply for the sake of growth.

I have no position in FB - but considering the above, I just find it pretty unbelievable that people are so myopically focused on the cambridge analytica stuff and using it as air cover to justify being max long FB - yet no one seems to be actually looking at the core business.

Your top down framing of revenue growth makes a lot of sense and is also how I look at it, but I disagree with the #s. I think it is very unlikely world online advertising spend will only grow by 13% in 2018, particularly since we're talking about spend measured in USD and for the first half of the year we are benefiting from a 10%+ depreciation in the USD vs GBP and EUR, and in the second half, benefiting from a smaller but still substantial mid-to-high single digit depreciation in the USD vs GBP/EUR. If for the year we end up seeing a ~10% benefit from FX on the EUR and GBP, and let's say that for the world ad market spend is ~25% Europe as it was for FB in 2017, then that is a 2.5% bump, which is meaningful. That means that in order for online ad growth to be 13% in USD, it needs to be ~10% in local currencies.

We've seen accelerating transition of spend online (% of total ad spend that goes online each year), and are only at ~40% right now. There will eventually be a limit, but advertiser discussion of relative returns on ad spend suggest to me that that transition is not nearly complete yet. Further, the UK is an example of a market that is further ahead of the U.S./world on the transition of spend to digital, so you can study that for another sanity check.

The world ad market in constant FX will likely grow something on the order of ~3% or so, so keep that in mind when considering the 10%. If we go from 40% penetration to 44% penetration (slightly less penetration growth than in '17, which would be a reversal of the trend FWIW) and growth is 3% constant FX, that'd get us to ~3% + (44/40 = 10.0%) = 13.3% + 2.5% FX = 15.8%, or ~16%.

Facebook has been taking ~50% of incremental digital ad spend, so ~$200bn * 16% = $32bn growth * ~50% = $16 billion of Facebook revenue growth, slightly more than consensus.

You can disagree +/- a bit, and I agree Amazon is a risk, but I think the consensus #s are very reasonable, and FWIW in the past have proven consistently conservative. As have "consensus" high-level predictions for digital ad growth, such as the 13% you mention.

Engagement is extremely important, but so is advertiser return on spend. If advertiser return on spend is very high on Facebook, they increase ad dollars allocated to Facebook, and even if ad load is constant and engagement flat, the price per ad will rise so supply equals demand. It is market-determined pricing. As long as advertisers continue to feel return on spend is strong, which per my checks they do, I will not be concerned.

Also, keep in mind that while Facebook engagement has slowed quite a bit, Instagram trends remain very positive, and Instagram is a very important part of the business.
« Last Edit: April 09, 2018, 12:06:52 PM by philly value »

siddharth18

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Re: FB - Facebook
« Reply #588 on: April 09, 2018, 02:44:36 PM »
1) The company has put up extremly high growth numbers over the past few years. First, via increasing ad loads. Second, via increasing pricing. This is a trend that is not sustainable, and sooner rather than later will impact advertiser ROIs negatively. This is antithetical to the typical idea of a "quality business" like Amazon or Google, who typically extract cost advantages from their scale and then pass that on to the customer in the form of lower pricing. Instead, Facebook extracts growth at the expense of their customers rather than passing the benefits along.

Fair point regarding ad load. But you're misunderstanding "increasing pricing." You have to understand that FB ad prices are not set by FB, they're set by demand. And demand is set by the advertisers' ROI.

The nature of ad auction means that as more and more advertisers enter the ecosystem, the more each advertiser (in general) has to pay in order to outbid the other advertisers. In fact, as ad platforms like Adwords and FB Ads grow, advertisers over the years have had to increase their bids simply to keep their volume stable. Think about that for a moment. This means that (assuming same product and sales funnel), the advertisers must sacrifice their ROI just to buy the same number of clicks. What does this mean? It means that all the monetary benefits from the advertising accrue to the ad platform simply because advertisers keep outbidding each other.

Let me give you a simple example.

For the keyword "car insurance" in Google, imagine there's only 1 advertiser bidding on this term in US. What will he pay? Likely $0.01 since that's the lowest allowed bid on Adwords and there's no competitors. After spending some money, this advertiser realizes each visit originating from the ad with keyword "car insurance" brings in an incremental profit of $10. This is obviously amazing since he's capturing most of the incremental profit ($9.99 in this case and only has to share $0.01 with Google).


Then imagine an identical competitor with identical economics also decides to advertise on Google. He understands search advertising is extremely profitable and is happy to outbid the first advertiser by bidding $0.02. He's hence outbidding the original advertiser and captures all the traffic. His incremental profit is now $9.98 per click.

The first advertiser then realizes he's being outbid by his competitor and decides he'll increase his bid to $0.03 because he'd rather profit $9.97 rather than lose all the traffic and not profit at all. This increased bidding war goes on and on until both players successively increase their bids until such point that most of the incremental profit per click accrues to the ad platform (Google) in the form of increased click prices simply because the bidding war in online ad ecosystem is a race to the bottom for the advertisers.


This dynamic intensifies as more and more advertisers join the bidding pool and the more they optimize their funnel the wring out more revenue from each click. This underlines the fact that as ad platforms become more efficient, all the incremental benefits are passed back to ad platforms in the form of increased ad prices without meaningful benefits to any advertiser in particular. For example, if inflation or lax regulations increase profitability of insurers, their profit per customer will increase. This will increase their ability to pay more per customer acquisition/click. But since EVERYONE's profitability goes up, EVERYONE will increase their bid prices but no particular advertiser will capture any incremental benefits from inflation or lax regulations. The only entity to benefit is the ad platform.


Hence, the overall revenue per user gets a boost from these 3 things:
1. Increased competition (more advertisers entering the game)
2. Increased efficiencies/conversion rate from click to sale (this involves landing page optimization, funnel optimization which drives more sales from same number of clicks).
3. Increased prevalence of eCommerce (more users get comfortable purchasing online).

Also, read this: https://www.wired.com/2015/09/facebook-doesnt-make-much-money-couldon-purpose/
« Last Edit: April 09, 2018, 04:53:57 PM by siddharth18 »

Broeb22

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Re: FB - Facebook
« Reply #589 on: April 09, 2018, 04:24:52 PM »
Related to Siddharth's point, I have heard complaints from business owners with Facebook pages that they are being "forced" to advertise (for products, events, etc.), even if they could promote themselves adequately based on their own organic traffic.

Does anyone have first-hand experience of this type of tactic from Facebook?

If this is occurring, does it seem like FB is too aggressively monetizing its user base, and putting people in a position where they would be more than happy to switch to another platform if one were to arise? I guess at the end of the day, all businesses go where the most users/eyeballs are, so as long as FB's policies don't begin to push out users, the businesses advertising will cry foul but still ultimately pay for the ads.

I'm just bringing this point up because Siddharth made it sound so simple and clean and easy, and that this is all about simple supply and demand. Based on some anecdotes I've heard, maybe Facebook has the ability (and perhaps willingness) to exploit its users and force small advertisers to advertise.

Disclosure: Long FB