Facebook reported their latest results last week, the social media giant now has 1.39 billion users of which almost 900 million people use the social network every day. Thanks to their advertising strategy, revenue soared past $12 billion in 2014. Its all good, right?
Well some people are not so sure, looking at the reports, some people believe that there may be problems for Facebook down the line when it comes to long term growth prospects. There is a big discrepancy in user monetization between North America and the rest of the world.
Data given to us by Statista shows that Facebook generated $9 in revenue per user in North America during 2014, $3.45 per European user and just $1.27 per user from the Asia-Pacific regions. This means that 74% of Facebook’s revenue is coming from North America and Europe which would be okay if it was not for the fact that Facebook’s growth is now starting to soar in regions where they are generating very little revenue.
It is clear that Facebook growth in America and Europe is starting to plateau, last year there were 167 million people who joined Facebook, however only 26 million were from North America and Europe. So should Facebook be concerned? Is there really a problem down the line for the go-to social media giant?
The answer is no. It is highly unlikely that Facebook will run into big monetization problems into the future. There are plenty of ways for them to make money from users and you can bet that Facebook always knew that the day would come where the user growth would start to plateau.
You have to remember that Facebook is not just Facebook anymore, there are a slew of other services tied to the social network which present monetization opportunities. Instagram, Facebook Messenger, WhatsApp, these are all different channels which have been acquired by Facebook so far which present monetization opportunities. Not to forget also the Facebook At Work website which is due to launch for companies some time this year. Facebook has also acquired the Oculus VR which could prove to be a vital source of revenue down the line.
While Mark Zuckerberg has already stated that monetizing with ads is not the right thing to do with services such as WhatsApp, he has mentioned that outpacing the competitors first is the key priority.
Zuckerberg bluntly stated in February of last year, following the acquisition of WhatsApp, “I don’t personally think ads are the right way to monetize messaging.” Beyond WhatsApp, that could mean Facebook doesn’t plan to use ads to monetize its own Messenger app, either. That makes sense, as the highly personal and intimate nature of messaging would cause ads to stick out like sore thumbs.
However on the Instagram front, Facebook have started using video ads and promoted photos as sources of advertising revenue on the platform. There are plenty of channels for Facebook to acquire revenue from into the future, user monetization is far from the core focus when it comes to getting cash flow.
Facebook will continue to grow strong for the foreseeable future and has plenty of other markets to tap into should it require more money coming into the business.
About The Author
Mark is the founder of 60 Second Social media where he provides social media news and digital marketing analysis, he is also a proud father of his bearded dragon, Lola. You can follow him on Twitter here. You can also follow 60 Second Social on Twitter here.