Facebook Inc (FB)’s Q4 2014 Earnings Conference Call Transcript

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Operator
Your next question comes from the line of John Blacklidge with Colin. Your line is open

John Blacklidge, Colin
Great thanks, just want to think about your view about Facebook as a video platform given that video views per day increase to 3 billion in December from a billion in September 2014 and now we should think about the video content mix over the next couple of years and just it seems like a topic being given a sense of user and advertiser feedback on the autoplay video ads that could be great. Thank You.

Dave
l will talk about the consumer product and then Sheryl can jump in about ads. So, what we are seeing in and I eluded to this In my opening remark that there has been evolution of content on Facebook over the last 10 years towards richer formats that convey more of the moments that people care about. So if you go back 5 years ago a lot of Facebook was primarily text right and a little bit of photos and now the primary mode people to share are using are photos, I wouldn’t be surprised if this in the future that shifted more and more towards videos. So we are thinking about how to enable consumption first that the content people are sharing and this year an increased focus on new opportunities around production that way it’s easier for people to capture the moments that are important to them, create higher quality moments and pieces of content out of those and increase their experiences through that, so there’s a lot more to do here and I think this is going to be one of the big trends over the next 3 or 5 years in growth in video and richer content in our service.

Sheryl
From a consumer and marketer feedback on video ads point of view those two things really go together, it’s exciting that we gotten into 3 billion video views per day that means consumers are using video ads and enjoying them on Facebook and newsfeed. The way we think about our ads products is that we want them to blend in with the consumer experience. And so that the fact we have this much consumer video on Facebook means we have an opportunity to grow our ad business and that’s exciting for marketers.

Operator
Your next question comes from the line of Justin Post with Merrill Lynch, your line is open

Justin Post, Merrill Lynch
Great, It looks like you did 9$ of revenue in the US per MAU which you know applies over 30$ run rate which is impressive. Sheryl maybe first question to you how do you grow that from here is it usage, is it more higher ad loads, is it the mix of ads or is it targeting maybe some thoughts on how you grow from there and then Mark if you look at your other 3 platforms you know Whatsapp, Instagram messenger and other things you probably in your mind. Can they monetize anywhere as well as Facebook if you look out your five year plan? Thank You.

Sheryl
Sir thanks for the question, when you think about whats happening, certainly the growth has been good but it’s still true that marketing dollars have not followed consumer time in the same percentages. So, in the US mobile gets 25% of consumer media time but only 10% of the ad budgets and to take one comprehendible example that means that for every consumer hour spent on print marketing dollar. And they spend 7 cents per hour on mobile which means we have an opportunity to grow.

One of the most important ways we grow is not just to bringing more marketers into Facebook having them use more of our ad products but as you mentioned that are targeting. A more relevant ad is a better ad experience for consumers, but also drives them a much higher return for marketers and since we are running an auction, as our ads get more relevant and we provide higher ROI, we should be able to continue to grow. I think we have done a good job over the last year in making our ads more relevant and people on this call would say that you see more relevant ads than you used to a year ago. But I still think you know some of the Facebook ads still have room for improvement in terms of relevance and so we see a lot of room for improvement there and those ROI we deliver and then the experience we can provide consumers.

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