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Bloomberg's Waral on Facebook: Ad Metrics Tough to Beat (Audio) · Bloomberg Intelligence

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  Speaker 1: Global business news twenty four hours a day at Bloomberg
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  Speaker 1: This is a Bloomberg Business flag from Bloomberg World Handquarters,
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  Speaker 1: Signed Charlie Pellett. Facebook reporting second quarter revenue that beat
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  Speaker 1: handless projections, lifted by sales of video and Instagram ads.
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  Speaker 1: We did see shares of Facebook up by seven percent.
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  Speaker 1: Google reports earnings tomorrow. After the bell. Moments ago, we
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  Speaker 1: heard from amngine its second quarter profit beat analysts estimates,
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  Speaker 1: driven by higher than expected drug sales. The company also
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  Speaker 1: point five percent. Group on shares moving higher now by
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  Speaker 1: eighteen percent after boosting its year view. Right now we
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  Speaker 1: have got its yearly reven new view. I should say
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  Speaker 1: SMP down two points to sixty six and drop there
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  Speaker 1: of point one percent down, Industrials down a point little change,
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  Speaker 1: as stack up twenty nine a gain of six tenths
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  Speaker 1: of one percent, and gold up again. There of one
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  Speaker 1: and a half percent. I'm Charlie Pellock. That's a Bloomberg
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  Speaker 1: business flash. This is taking stock with Gableen Hays and
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  Speaker 1: pim Box on Bloomberg Radio. Shares of Facebook are moving
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  Speaker 1: higher by more than seven and a half percent and
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  Speaker 1: after hours trading. As a result of their second quarter
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  Speaker 1: earnings release, the company reported that second quarter sales climbed
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  Speaker 1: fifty nine percent to six point four billion dollars. That
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  Speaker 1: beat analysts projections. Also, to take a look at how
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  Speaker 1: many monthly average users they added last quarter, sixty million
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  Speaker 1: monthly average users were added. That's twenty times what Twitter added.
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  Speaker 1: Here to tell us more about Facebook is to Tendra Warrel,
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  Speaker 1: global Internet and consumer Electronics analysts for Bloomberg Intelligence, providing
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  Speaker 1: unique and real time research in a variety of industries, markets,
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  Speaker 1: and all the government factors that affect businesses. Our terminal
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  Speaker 1: customers can access this function at b I Go and
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  Speaker 1: there Tender joins us from our Bloomberg nine six studio
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  Speaker 1: in San Francisco. Jotendra tell us about Facebook and the
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  Speaker 1: results today a PM so an absolute blowout quota. The
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  Speaker 1: street was expecting forty nine percent growth and revenues. You know,
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  Speaker 1: they ended up coming at fift Mobile is basically behind,
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  Speaker 1: uh the entire growth story here, and obviously video acceloration
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  Speaker 1: continues and a new revenue stream. Instagram is probably adding
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  Speaker 1: more than what what we thought it did. So all
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  Speaker 1: in all, great quota. And most importantly, if you look
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  Speaker 1: at the engagement numbers, they are accelerating, so people are
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  Speaker 1: more engaged on Facebook or any competition fears that people
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  Speaker 1: had may alleviate, like likes of Snapchat cutting into Facebook's
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  Speaker 1: time or people getting bored of Facebook and all those things. Uh,
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  Speaker 1: these numbers are not showing any of that fatigues. So
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  Speaker 1: all in all pointing to continued growth and market share
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  Speaker 1: um in in mobile advertising. So tender to we do
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  Speaker 1: we get any breakdown geographically US versus Overseas, etcetera. Yeah,
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  Speaker 1: we do. And the interesting thing is, like US growth
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  Speaker 1: was very strong about six y o y over here
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  Speaker 1: and and really it's a broad based sort of growth
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  Speaker 1: that we're seeing across you know, different regions that Facebook
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  Speaker 1: operates in. But most importantly, like you see an acceleration
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  Speaker 1: in our pool, like the average revenue they are making
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  Speaker 1: poor user that's going up. Probably they are up selling
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  Speaker 1: more services more targeted as to the same users loosing
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  Speaker 1: more dollars out of it. Uh. So you see US
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  Speaker 1: obviously leads over there with the r pool numbers, but
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  Speaker 1: the US growth I think it's really broad based at
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  Speaker 1: this point. I wonder if you could comment on the
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  Speaker 1: goodwill that's such a blowout Quarter creates for Facebook to
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  Speaker 1: allow them to invest in things such as Internet, drones
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  Speaker 1: and virtual reality. Reported from our Sarah Fryer at Bloomberg. Yeah,
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  Speaker 1: it continues to build that good will. Actually, so Facebook
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  Speaker 1: has been up pulling this balancing act beautifully in terms
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  Speaker 1: of like supporting these heavy growth expectations with their core
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  Speaker 1: business Instagram and video while building new revenue streams like
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  Speaker 1: rtual reality and let's not forget messaging. You know their
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  Speaker 1: messaging services. What's happened Messenger have more than two billion
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  Speaker 1: people on on that service and they don't make money
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  Speaker 1: out of it yet. So the idea here is, let
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  Speaker 1: the core uh support of growth that Wall Street expects
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  Speaker 1: until the new revenue streams come to write it further, So,
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  Speaker 1: can anybody's Facebook now, just in a world a universe
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  Speaker 1: of its own, can anybody quote unquote compete with Facebook? Well,
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  Speaker 1: there's Google on the other end of the equation, but
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  Speaker 1: the Google and Facebook basically account for fifty of mobile
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  Speaker 1: advertising UM industry revenues. And really the strength that Facebook
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  Speaker 1: has that nobody can really compete with them is targeting.
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  Speaker 1: You know, they can target not just like what interest
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  Speaker 1: do you have, but contextually when you are more likely
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  Speaker 1: to do it better than most other incumbents. So that
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  Speaker 1: translates to better r o I for advertisers, and you know,
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  Speaker 1: once they see better r o I, they come back
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  Speaker 1: with more to sender. What does this tell us about
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  Speaker 1: not only the performance of Facebook, but comparison with Twitter
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  Speaker 1: basically tells us that Twitter has a company specific issue
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  Speaker 1: and brands are less likely to sort of like spick
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  Speaker 1: with them. I mean, they're seeing brand weakness over there. Uh,
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  Speaker 1: They're they're in. They're basically they're seeing brand weakness in
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  Speaker 1: like advertising revenues that they're seeing and the growth rate
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  Speaker 1: expectation for three Q is like five. I mean that's
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  Speaker 1: Yeahhoo's mobile growth rate was a three last quarter. So
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  Speaker 1: obviously the company's specific issue and there's no clear signal
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  Speaker 1: yet that the new Life strategy can turn around this trend.
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  Speaker 1: But the tender seems to me too. These are different
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  Speaker 1: business models. They sell people different things, right, comparing Google's
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  Speaker 1: mobile to facebooks mobiles mobile. Because Facebook, there's only one
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  Speaker 1: site that does this for you, connect to you with
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  Speaker 1: friends and business and everybody else. Twitter's all about Twitter
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  Speaker 1: character messages out. Uh. That's why I ask cannybody compete
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  Speaker 1: with them because they may have equal mobile ads with Google.
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  Speaker 1: Google may may meet them there, but in terms of
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  Speaker 1: what they do, who else does this to this extent? Right?
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  Speaker 1: So what advotisers only care about what is the cost
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  Speaker 1: of acquiring a user and what is the return or
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  Speaker 1: investment I get for paying that cost, and whoever shows
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  Speaker 1: better on those metrics, they go with them. Right. So
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  Speaker 1: if you look at Twitter's market share, it's like loose
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  Speaker 1: single digits verresus. We talked about Google and Facebook taking
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  Speaker 1: like of the market so they have the volume, they
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  Speaker 1: have the targeting. But you're right about like, Um, you
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  Speaker 1: know these guys serving sort of different uh forms of advertising,
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  Speaker 1: especially Google and Facebook because you know, search is equally important.
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  Speaker 1: So Google and Facebook have pretty much become the staple
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  Speaker 1: of digital advertising for marketeers. Septender Roll, thank you so
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  Speaker 1: very much for joining us from Bloomberg Intelligence, where his
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  Speaker 1: global Internet and consumer Electronics analysts, doing a terrific job
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  Speaker 1: today of just laying out these amazing Facebook numbers. I
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  Speaker 1: want to think Marx Kosti, who's our technical director today,
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  Speaker 1: and of course Sam laying U putting together to a
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  Speaker 1: terrific show today. As our producer, I'm Kathleen Hayes along
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  Speaker 1: with Pim Fox. This is Bloomberg. Yeah, coming up Bloomberg Laws.
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