At the end of each fiscal quarter, the media rush to report on the latest earnings for major public tech and social media companies. A typical headline for quarter-end reports reads like a scary combination of abbreviations, numbers, and dollar signs—something along the lines of: “Twitter Q3 Earnings: 284 Million Monthly Active Users, $361 Million Revenue, $0.01 EPS” or “Facebook Beats In Q2 With $2.91 Billion In Revenue, 62% Of Ad Revenue From Mobile, 1.32B Users.”
Unless you own stock in these tech companies, the financial scoreboard doesn’t mean much to you or your business. So why does this news matter? When companies report their earnings, we get valuable data that gives insight into what’s happening in the world of the social web—if you know where to look.
To help you navigate this week’s earnings reports, here are some important earnings figures that can help shape your social media strategy for the upcoming quarter:
Q3 numbers to watch:
Social media participation
Social ad revenue
Major social networks like Twitter and Facebook regularly report on the average number of daily active users (DAU) and monthly active users (MAU). These figures are often compared with previous quarter and annual results, to determine how much the social network’s user growth has been affected.
For social media practitioner, these figures help to keep track of big-picture trends. User growth is especially important to track for smaller companies, or ones that recently went public—these figures can help you determine early if this is a social media channel or service worth including in your social media efforts.
Content creators versus content readers
One of the interesting figures coming out of the latest earnings report from Twitter is the number of “logged out” users, or users who browse Twitter feeds or read individual Tweets without logging in to the social network, or having never made their own account. In the earnings conference call, Twitter CTO Anthony Noto noted that these users, commonly known as “lurkers” in Internet-speak, can still be monetizable once the company figures out the right consumer appeal for them.
The phenomenon of monitoring social networks without participating in any conversations is perhaps as old as Internet forums themselves. With more social networks focusing their efforts on gaining more insight into user behavior, this foreshadows future developments aimed at a more inclusive network—which is definitely something to watch out to help your brand’s customer engagement on social media.
Another number to watch is the average number of mobile MAUs, and what percentage of the total monthly users logged in to the network on mobile. For Twitter, for example, a staggering 80% of total MAUs used the mobile platform; for Facebook, mobile users made up approximately 70% of the total users. Moreover, mobile advertising revenue represented nearly 70% of all ad revenue for Facebook—which means users are not only browsing and posting through mobile platforms, they are also purchasing goods advertised on the social networks.
Major social networks have seen a steady increase in mobile users with every fiscal quarter, and the use of mobile messaging apps has spiked. Consider Facebook’s investments into buying WhatsApp and creation of a standalone Messenger app, and it becomes pretty obvious that it’s time to consider putting some eggs in the mobile platform basket, if you haven’t already. How you do it depends on the nature of your business; at the very least, your business’s website design and navigation should be optimized for mobile use. Judging from Facebook’s ad revenue numbers, investing in some Facebook Sponsored or Boosted posted is also likely to pay off.
Major social networks and up-and-coming mobile apps with expanding user bases are buying into social selling. In the last month alone, Snapchat and Instagram, both huge hits in the mobile app market, have rolled out native advertisements. Twitter’s ad revenue in Q3 has increased 83% from last year’s earnings report, and Facebook experienced a 63% increase in advertising revenue in the same time period.
These numbers mean that, year after year, social media is climbing to the top ranks among advertising channels. Ad revenue numbers from major social networks can tip you off where you may want to take your brand’s advertising budget. Social media is an easy and cost-efficient channel to start promoting your business—you can start as small as investing a few dollars into boosting your Facebook posts.
Acquisitions and new developments
Finally, earnings reports are a good way to monitor relative success of a recently developed app, as well as track progress on how the company’s recent acquisitions affected their total revenue. Quarter-end reports also contain “forward looking statements” —simply put, plans for the future that may be relevant to your social media strategy specific to that network. We went over some of what Facebook and Twitter have planned for the upcoming year in the latest episode of Social Update, so be sure to keep informed!