Home » Facebook’s (FB) CEO Mark Zuckerberg on Q2 2014 Results – Earnings Call Transcript

Facebook’s (FB) CEO Mark Zuckerberg on Q2 2014 Results – Earnings Call Transcript

In some countries our surveys indicate that our ads are getting close to the quality level of organic content. But in most developed countries we still have lot to do. We expect to continue to focusing on this for a long time.

So that’s my update on how we’ve been executing over the last quarter. It’s been a quarter with good performance and continued momentum. So I want to thank everyone who works with Facebook and is part of our community, including our shareholders and partners. Because of your efforts, we’re continuing to make progress towards our mission to help connect the world, and we’re improving 100s of millions of peoples’ lives every day. I am grateful for your support and to have the chance to work with all of you.

Thanks and now here’s Sheryl.

Sheryl Sandberg

Thanks Mark and hi everyone. As Mark said, we had a strong second quarter. Ad revenue grew 67% year-over-year to more than 2.6 billion. Mobile ad revenue grew 151% year-over-year and that makes up 62% of our ad revenue. We continue to focus on three key areas in investment; capitalizing on the shift to mobile; growing the number of marketers using Facebook; and building our ad products. These investments continue to generate broad based growth.

All geographies and all marketer segments performed well this quarter. Our team has a really strong belief in what we’re building; the world’s first ad platform that delivers personalized marketing at scale. While we believe it’s still early days, we’re pleased with the progress we’re making and I want to join Mark in congratulating our global teams on their continued execution.

Today I’m going to focus on two of our key marketer segments; small business and brand marketers, as well as cover some of the investments we’re making on the products in ad-tech front. We believe that personalized marketing of scale can drivers else for all types of marketers. Just a few weeks ago, I was in India and I hosted our first India SMB roundtable. One of the entrepreneurs I met, Vivek Prabhakar built his house just a few years ago to raise the money to start his and his wife’s dream business Chumbak, a company that makes India Inspired products. Facebook is Chumbak’s leading marketing channel and is responsible for 35% of online revenue and 38% of their Web site traffic. Their Facebook ads deliver a 5x return on advertising spend and has helped company grow to more than 150 employees in three offices.

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We have more than 30 million active small business pages, and over 19 million of these are active on mobile. We think we have a big opportunity to help SMBs like Chumbak grow their businesses, and I’m pleased to announce today that we have over 1.5 million active advertisers. We’re also ramping up our engagement with this community. In the U.S., we’re hosting Facebook Fit workshops in cities like New York, Chicago and Miami to help small businesses. And we’re doing this globally, including forming our first European SMB cap.

We’re also making great strides in our work with our larger brands to increasingly recognize how our scale, targeting and measurement capabilities can drive great results. For example, P&G and Gillette worked with us and agencies IVS and Mediacom to launch its Vector III razor to men in India. 80% of the 100 million Facebook users in India are on mobile and a majority of these are using feature phones. This was our first feature phone only Facebook campaign. It reached 60% of Gillette’s target audience and generated significant lift in both message and ad recall.

As we work with brand marketers around the world, we focus on how they can leverage our technology platform to build their brands to create a story telling. We saw many great examples of this, at the recent online festival. We were excited that campaigns that make Facebook a key part of their effort took home prestigious awards.

The World Cup also provided a great opportunity for brand building on Facebook. Facebook was an important part of this global event with 350 million people joining a conversation, generating 3 billion interactions. The final was the single most talked about sporting event in Facebook history, generating 280 million interactions from 88 million people.

Brands such as Diesel, Nike, Ford and McDonalds capitalize on this global conversation. McDonalds worked with agencies, OMD, Framestore, and ARC sponsorship, as well as Facebook’s Creative Shop to produce 30 videos that used french fries as players. FryFutbol recreated the most spectacular World Cup moments and ran them as videos the very next day with the french fries acting as the players. This campaign reached 125 million people in 158 countries.

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We also remain committed to investing in product development to drive higher returns for all of our marketers. Our custom audience’s capabilities, which enable better targeting are been adopted quickly and are now been used by 91 Ad Age 100. Earlier this year, we launched website Custom Audiences, which enabled marketers to target recent visitors to their websites. This is likely targeting but it’s even more effective because it works across both web and mobile. We’re pleased with the early reaction from marketers.

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