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Recap: Facebook’s Q1 2016 Earnings Call

Written by: Juliana Casale, Director of Marketing

As highlighted in our Q1 2016 Global Facebook Advertising Benchmark Report, marketers continue to invest more in video ads on Facebook—especially on mobile—to achieve their direct response performance objectives. In North America, 26% more mobile ad spend was allocated to video formats in Q1 2016 compared to Q4 2015. In the Asia-Pacific market, the quarter-over-quarter spend share increase was even higher at 45%. Overall, the share of mobile ad spend to video formats grew across all major verticals, with gaming exhibiting the largest increase.

Yesterday’s Facebook earnings call reflected this strong growth. As CEO Mark Zuckerberg stated, “We’re at the beginning of a golden age of online video. Video isn’t just a single kind of content; we think it’s a medium that allows people to interact in a lot of new ways.”

These developments also had analysts excited:

  • Total revenue grew by 52% year on year to $5.4 billion
  • Q1 ad revenue grew by 57% to $5.2 billion
  • Mobile ad revenue reached $4.2 billion, up 75% year over year; now accounting for 82% of total ad revenue
  • North America and Asia Pacific were Facebook’s fastest growing regions,with advertising revenue growth of 64% and 62%, respectively

For further takeaways from Facebook’s Q1 2016 earnings call, read on:

Stats and Facts

Facebook Revenue Q1 2016

Reach

  • Facebook now has 1.65 billion monthly active users
  • Globally, people spend more than 50 minutes a day on average using Facebook, Instagram and Messenger
  • More than 1 billion people are consistently using Facebook on mobile every day
  • 1 billion people use WhatsApp every month
  • More than 400 million people are active on Instagram every month
  • In Q1, the time people spent watching videos on Instagram increased by more than 40% over the preceding 6 months

 

Facebook daily active users Q1 2016

New Developments Since Q4 2015

  •   The launch of Facebook Live – a live broadcast from your personal Timeline
  •   Bots for Facebook Messenger
  •   News feed ranking for Instagram
  •   Shipping of Oculus Rift headsets
  •   The Facebook Moments app gets facial recognition
  •   The introduction of Auto Captions to video ads
  •   The Canvas ad format rolls out
  •   Lead ads fully rolled out
  •   Expanded Lift capabilities

Takeaways For Advertisers From Sheryl Sandberg

Direct response commitment – “Our direct response business continues to be very strong. It’s very ROI focused. We’ve continued to invest and roll out products that help – like Lead Ads, where people can fill out forms on a mobile device and take their contact info from Facebook.”

Adapting video from TV to digital ads – “Importantly, marketers have to adjust sometimes. While the 30-second ad does perform well in the news feed, we also see people understanding that the format is different. Creating shorter ads, creating ads that can work even without sound – more personal ads – has really mattered.”

Viva Facebook Audience Network – “We’ve seen the growth of native ads; 83% of the overall inventory on the platform is native, and over 50% of our publishers are only using native ads. We have some great examples of Audience Network really improving peoples’ results. A recent one is eBay’s Vivanuncios, which is an online real estate destination working in Latin America and Mexico. When they were using a combination of Facebook, Instagram and the Audience Network, they saw 57% lower Cost Per Install with placement optimization and 59% more volume vs. running on Facebook alone, which led to 6% incremental revenue. So compared to November a year before, the number of their app installs increased by 115%.”

Looking for further details on the call? Here’s some additional coverage:

Or you can go straight to Facebook investor relations to view the slides, listen to the call, and read the transcript in full.

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