Facebook Inc (FB) Q3 2015 Earnings Preview: Video Ads, Instagram Could Drive Revenue To ...

Facebook Inc. has been talking about video since 2013. Most recently, Chief Operating Officer Sheryl Sandberg referred to the Facebook app as a daily Super Bowl on mobile phones. Now, as the global social network gets ready to report third-quarter results, analysts say they’ll be looking for TV advertising dollars to start boosting its bottom line.

Facebook, which will report after markets close Wednesday, will no doubt try to focus minds on two big numbers: 4 billion (the number of video views each day) and 1 billion (daily unique users). And while Sandberg recently said Facebook prioritizes results, not clicks, it’s Facebook’s massive audience, and all of its data, that is expected to supercharge revenue growth for the company.

Facebook revenue is expected to reach $4.37 billion, up by 36 percent year over year, this quarter, according to analysts’ estimates collected by Yahoo Finance. Earnings per share are estimated to hit 52 cents, up 21 percent year over year.

Over this year, Facebook’s stock price has risen up to about 33 percent, propelling the company to join Apple, Alphabet (Google) and Microsoft in the “$300 billion tech club.” That quick rise, however, has some analysts worried about risk — notably in the company’s spending.

“We all know it’s mobile, it’s video, Facebook is king of the world,” said Tom Taulli, an analyst for InvestorPlace.com. “Where are they at in terms of spending? Things aren’t getting any cheaper in Silicon Valley. We’ve already seen Google take a step back. I think the stock has gotten ahead of itself. That’s a big risk.”

Finding The Money

Facebook’s growth has been fueled by mobile ad revenue, and it’s only increasing. Just as for Facebook’s second-quarter earnings report in July, Nanigans, an ad software company, found that the ads are drawing more clicks than ever before. Facebook’s click-through-rate was up 69 percent year over year, growing from 0.56 percent to 0.96 percent, Nanigans reports.

Not only is Facebook touting improved targeting, such as a new measurement tool called “advertiser outcome score,” the company has also added more advertising options. Facebook’s photo-sharing app Instagram opened advertising to all marketers in September and introduced 30-second video ads.

“For Facebook, there’s been a heavy emphasis on new ad types. They are taking all these steps on how we can drive more from the news feed,” said Tom Edwards, chief digital officer of agency business for marketing company Epsilon.

The expansion is working, for now. Ad spending from the same advertisers analyzed by Nanigans has increased 16 percent since last quarter, and mobile advertising spending is up by 10 percent from July’s report. Advertisers are also increasingly moving money to markets outside of the United States, up by 5 percent, according to Nanigans.

The growth of advertising abroad follows Facebook’s greater push to move into international markets, most notably emerging markets, as growth in the United States has plateaued. The company announced in September, three months after opening an office in Johannesburg, that Facebook’s total user base in Africa is about 120 million monthly active users. Facebook also introduced a lightweight video ad product, specialized for areas with slower wireless connections.

Facebook may also find new dollars in e-commerce. Business’s Pages are now being mobile-optimized, and the site added a “shopping” tab to the mobile app. Yet, some analysts are skeptical of Facebook becoming a destination shopping site.

“Google is a no-brainer as to what they give their customers. People are likely searching for a product, price or recommendation. Facebook isn’t used as much — if at all in certain segments — for getting advice on buying things,” wrote Kim Forrest, VP and senior equity analyst at Fort Pitt Capital Group, in an email.

Search has become more open on Facebook. Earlier this month, the company released all 2 trillion public posts for users’ to access through the search tab on the site and mobile app. 

The Big Expense

With Facebook spreading into new markets and industries comes concern about what it could means for expenses. Indeed, in the last quarter, analysts’ inquired about Facebook’s $2.8 billion spending, up by 82 percent year over year. In July, Facebook’s Chief Financial Officer Dave Wehner pointed to the acquisition of WhatsApp as a major contribution. The startup cost Facebook $19 billion, and the company has yet to enact a major money-making strategy for it.

Meanwhile, the team’s been retooling Messenger as the go-to messaging app — with GIFs, payments and artificial intelligence. “They’re turning Messenger into a mobile hub similar to what WeChat does in China. WhatsApp remains as the simple messaging app. The audience size is so big, yet the experience is so simple,” Edwards said.

Another big expense for Facebook — the $2 billion acquisition of Oculus — is also nearing its market debut. The consumer version of the virtual reality headset is expected to ship in the first quarter of 2016. As for content on the product, Facebook announced partnerships with 21st Century Fox, Lions Gate Entertainment, Netflix and Hulu in September.

“While some investors have expressed concern about the CY16 expenses guide as it relates to Oculus hardware, we are more focused on the health and trajectory of the core advertising business, where we continue to see significant runway,” Goldman Sachs wrote in a research note, according to Silicon Valley Business Journal.

Facebook Inc. (FB) | FindTheCompany

Facebook Inc (FB) Q3 2015 Earnings Preview: Video Ads, Instagram Could Drive Revenue To ...

Preparing for Black Friday: 5 key trends that could determine success

Last year the Black Friday juggernaut arrived in the UK and established itself as a new retail phenomenon. Whilst some companies’ websites creaked and fulfilment became a serious headache for others, not to mention the margin measuring impact of deep discounting, this pre-Christmas period has given the country’s retailers serious food for thought about how to ensure they strike the right chord in 2015.

As a channel with a strong heritage for driving conversions, the affiliate marketplace is well positioned to support advertisers’ efforts. With that in mind, what trends can we expect to see this year?

Smartphone traffic will play a crucial role

On Boxing Day 2014, Affiliate Window’s traffic via tablets and smartphones exceeded 50% for the first time. Drilling down into the affiliates and advertiser sectors that succeed on different devices provides an additional steer on how to optimise an affiliate campaign.

We know that consumers use smartphones to browse the Internet in ways they don’t on other platforms. Consumers are increasingly switching between devices. Having consistent messaging across all devices not to mention ensuring any dedicated mobile sites have affiliate tracking enabled should see a decent volume of both traffic and sales. However, as a more casual browsing device, don’t expect that traffic to convert as well. Consider offering additional non-CPA payments for those affiliates with a significant mobile reach.

Tracking conversions between devices will need to become the norm

With the significant growth in m-commerce, multi device consumption is common place. Google recently revealed their cross device conversion statistics, indicating that cross device activity can result in an increase of anywhere between 4-16% attributable sales. This matches the data we are currently seeing for our cross device product with some retailers experiencing around an 8 – 12% uplift in sales.

Without the ability to track cross device sales, affiliates are not being adequately or accurately rewarded for the full extent of the sales they are driving. Imagine telling your affiliates you were cutting their commissions by around 10% at the peak sales’ period of the year? Advertisers simply wouldn’t do it, but by not tracking sales across multiple platforms, this is what they are effectively doing.

The rise of the blogger

If there’s one topic that is guaranteed to cause affiliate marketers to scratch their heads in confusion, it’s how to engage the longtail affiliates on their programme. At this time of year many of the major affiliate sites, the large cashback and voucher code sites, have already agreed their marketing plans for Christmas with ratecards, promotional slots and commission rates agreed with many advertisers.

This is nothing new and has now become an established part of late summer. But trying to engage the many remains problematic. What’s even more frustrating is the affiliates who fall into this category are considered the most desirable by many and can help deliver the most ‘incremental’ sales.

With many bloggers primed and willing to feature content, products and services that are being heavily promoted by advertisers in the run up to Christmas, think creatively about how you work with them. Given the power of these affiliates to influence, consider blended payment models that offer top up payments for assisting sales in return for the fantastic brand exposure they can offer.

Time of day will be critical

Looking at our data from Black Friday 2014, we have been able to understand the peak periods for transactions throughout the day. The share of desktop sales peaks at 11:00 – 12:00 and then 13:00 – 14:00 with 7% of all desktop sales being driven between these hours. Desktop sales then drop off after 2pm.

In contrast we see smartphone activity peak in the morning with the greatest share of sales occurring during the morning commute – between 8am and 9am. This share then drops off before seeing another peak during the evening commuting hours – hitting 6% between 6pm and 7pm.

Consider how this will impact how affiliates might push you early in the day in order to maximise coverage of your products. Speak to affiliates about how they can support your efforts across different devices at different times of the day and also across the four day weekend.

Also consider… It’s not just Black Friday. Traditionally in the UK, Cyber Monday (the first Monday in December) has always been the largest trading day in the run up to Christmas. Taking advantage of ‘Cyber Weekend’ could really see advertisers benefit from this busy period. Generally we saw a bigger November for the very first time last year, so if 2015 follows suit, expect a longer Christmas lead in and a bump back to earth after the Black Friday steamroller.

Black Friday threw up other trends such as a hike in average order values and how telecoms clients offering compelling deals showed the day wasn’t just a retail focused one. Finally, for SMEs, consider the biggest sale Affiliate Window tracked across the day wasn’t for John Lewis, Marks & Spencer or Currys, but for Wex Photographic who made one affiliate very happy when they tracked a sale for £12,000.

There is a myriad of opportunities and considerations for any affiliate programme: the Black Friday phenomenon heightens the importance of getting it right. Now is the time to plan for every eventuality and engage with your affiliates at every level to understand what strategy is right for each and every one of them.

You can read more about each of the trends discussed in Affiliate Window’s whitepaper.

Preparing for Black Friday: 5 key trends that could determine success

Taking names: Facebook's newest ad unit could help retailers boost their email lists

Facebook’s product is important because email is the most cost-effective marketing channel that online retailers use.

Facebook Inc.’s latest advertising product could help retailers add names to their email marketing lists.

The social network today rolled out lead ads, a new ad format that eliminates the need for shoppers to fill out forms, such as an email marketing signup.

“These days people expect to be able to do everything from their phones,” Facebook states  in a blog post. “Mobile phones are where people communicate and discover the things they like, but historically, it’s been difficult for people on mobile to signal to businesses that they want to learn more about their products or services.” Lead ads aim to address that challenge by giving shoppers a way to sign up to receive information—like marketing emails and special offers—from retailers and other businesses in two clicks.

Here’s how the ad works: When a consumer clicks on a lead ad, a form that’s automatically populated with the contact information he has shared with Facebook, such as his name and email address, pops up. The consumer can then either edit that information or click a Submit button.

The information shared in a lead ad can then be integrated in real time within retailers’ customer relationship management systems, assuming that they work with one of the six vendors that Facebook is working with—Driftrock, Marketo, Maropost, Oracle Marketing Cloud, Sailthru and Salesforce. 27 retailers in the 2015 Top 500 Guide use one of those vendors’ systems, according to Internet Retailer’s Top500Guide.com. Merchants who use another system can manually set up a link between their CRM system and Facebook through a software conduit known as an application programming interface, or API, or they can download lead information manually into a comma-separated values, or CSV, file.

Shoe manufacturer and retailer Stuart Weitzman LLC used lead ads to find shoppers who wanted to receive its marketing emails, which feature updates and an “inside look into the world of Stuart Weitzman.” The ads yielded a 52% more efficient cost per lead across domestic and international markets, says Susan Duffy, chief marketing officer for the retailer, which is No. 473 in the Internet Retailer 2015 Top 500 Guide.

Email is a particularly appealing marketing channel for online retailers because it is easy on marketers’ budgets. For instance, Forrester Research Inc.’s “The State of Retailing Online 2015: Marketing and Merchandising,” which is based on a survey of 224 North American retailers, found that merchants email’s average cost per order is $6, making it the least expensive channel among the 32 channels it examined. For the sake of comparison, the average cost per order for retargeting ads is $10, $11 for affiliates and $28 for social media ads. 

Taking names: Facebook"s newest ad unit could help retailers boost their email lists