Commentary

You're Worth A Lot To Facebook, But There's A Problem

I’m pretty sure I’m persona non grata in most of the really good demographic groups, so maybe Facebook is really not talking about me.

But for what it’s worth, as part of its Q3 earnings report, the social site says each one its U.S. users is worth about $62 a year. That’s how much revenue they make off of each U.S. and Canadian user.

As a group, we North Americans are deluxe. Europeans are only worth $18.18 a year; users in the Asian-Pacific are only worth $7.56.

This might seem like a pretty cold way to size up your customers, but it reflects nothing about the real value of Facebook users as people.

It’s really a better indication of how well Facebook is doing around the world, and, of course, the relative strength of national economies and the maturity of its ad market. But removed from those big regions, Facebook chunked out, its revenue per user in the rest of the world is just $4.84.

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So, it would appear, there’s a lot of room for growth worldwide. However, in America, there is literally not room for growth, at all.

On its third-quarter investor call, Facebook warned that ramming any more ads onto the social network would probably create user revulsion.

You know how success ruins everything.

CFO Dave Wehner told analysts Facebook advertising increased by 50% for two years in a row. That can’t keep keepin’ on.

As Recode reported, “The ad load issue is not new. Facebook clearly stated last quarter that ad load was becoming a problem. But Wehner didn’t frame the problem quite as bluntly as he did Wednesday afternoon, instead calling it ‘a less significant factor’ in Facebook’s future revenue growth. ‘We expect our ability to grow revenue to be impacted accordingly,’ Wehner added at the time.

"That doesn’t sounds great, but sounds much more cheery than ‘future growth rates [will] come down meaningfully.’ "

pj@mediapost.com

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