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Instagram may be the key to the future profit growth of Facebook

via:博客园     time:2016/4/14 16:30:18     readed:1233

InstagramInstagram 可能是 Facebook 未来利润增长的关键

BI Chinese station April 14th Report

Instagram last summer to open its advertising API (Application Programming Interface), a large number of advertisers quickly stampede in.

In the fourth quarter of last year, 98 of the top 100 advertisers on the Facebook platform also advertised on Instagram. Instagram announced that the number of active advertisers on the platform increased to 20 in 6 months.

Instagram will undoubtedly play an important role in the next phase of Facebook revenue and profit growth. Analysts seem to have recognized this point, but whether they underestimated the effect of the subsidiaries may be caused to the Facebook?

What happened in the last quarter?

The Facebook issued a investors overjoyed fourth quarter earnings, profits exceeded analysts' expectations of 16%. Average advertising revenue per user in the fourth quarter increased by 2 percentage points to 37%. In contrast, the first three quarters of each user's average advertising revenue dropped significantly.

This trend is not entirely due to the Instagram fourth quarter revenue contribution ratio rose. Facebook on the right side of the ads on the right side of the column made a number of changes, the results in a reduction in the number of ad impressions, the average price of advertising has increased significantly. These changes came into effect in the third quarter of 2014, and the results were comparable in the fourth quarter. In addition, Facebook from the fourth quarter of 2014 was affected by the negative impact of foreign exchange factors, which also makes it in the first three quarters of last year, the situation has become more difficult.

Unfortunately, we are unable to know the impact of Instagram on the number of ad impressions in the end how much, everything remains to be further observed.

Instagram will continue to promote the growth of the number of ad impressions?

Facebook new users have been to 50 million people to the speed of the 30 million quarter by quarter. According to this, we can reasonably predict, at the end of the first quarter, the total number of users should have reached the. With the average value of the average person to calculate, corresponding to an increase of 13%, the lowest level in the last 8 quarters of almost Facebook. Thus, this prediction is quite conservative.

Analysts on average expected Facebook first quarter revenue of $1 billion, of which about $or $97% of revenue from advertising business. According to this calculation, the average advertising revenue per user in the first quarter of Facebook was $3.11, corresponding to an increase of 33%.

Facebook average advertising revenue per user in the first quarter of 2015 increased by 29% year on year. Remove the impact of advertising options and exchange rates and other factors, investors can expect average advertising revenue per user will be at least because of the steady rise in the price of advertising and advertising. In the last quarter, advertising prices rose by 21%, the number of ad impressions increased by 29%, while the user growth rate of only 14%.

If the growth of Instagram advertising can drive the total number of ad impressions in the first quarter to achieve synchronous growth, then the advertising prices need to rise by 16.5% to 19%. But taking into account seasonal factors, the first quarter of the advertising price increase may be in the fourth quarter, based on a decline, so this prediction is more reasonable. Taking into account the strong growth in Instagram advertising, the number of ad impressions is also quite reasonable expectations.

This means that analysts expect Instagram first quarter revenue is reasonable, but this is only a conservative estimate of the results, which are based on the prediction of the user's.

Although analysts are expected to be higher than the Facebook, but Instagram is probably an important factor to promote Facebook performance than expected and stock prices rose.

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