How to Make Money From Your Content on Facebook?

what happened
Despite an antitrust investigation and a growing boycott from advertisers, Facebook managed to beat analysts’ expectations across the board this quarter. Its earnings, revenue, and monthly active user numbers all surpassed expectations, despite growing more slowly than in previous quarters. Facebook’s stock is up sharply in aftermarket trading.

(Below is Investopedia’s original earnings preview, published July 28, 2020)

What to Look For
Facebook Inc. (FB) is facing one of the toughest periods of its 16-year history as hundreds of advertisers boycott the social media website amid heated criticism over hate speech posted on its platform.1 Even as Facebook’s monthly active users (MAU) rise amid the COVID-19 pandemic, both the boycott and slowing economy could lead to falling advertising, Facebook’s main revenue source. The boycott started at the end of June as Facebook already was grappling with the fallout of the pandemic.

Investors will be looking for the latest signs of how Facebook is weathering the pandemic when it reports earnings on July 30, 2020, for Q2 FY 2020.2 Analysts estimate the company’s adjusted earnings per share (EPS) will decline as revenue growth slows considerably. While the impact of the boycott on Facebook’s results will be limited since it started late in the quarter, investors will want to hear from management how the boycott affected revenue in July, the first month of the current quarter.

Investors also will be looking at Facebook’s growth in MAU and average revenue per user (ARPU) in Q2. These two key metrics gauge the extent to which the company is attracting and retaining new users, and how well it is monetizing its user base mainly through attracting advertising. Analysts forecast MAU will rise while ARPU will decline for Q2.

Shares of Facebook were keeping pace with the broader market for most of the past year, crashing in tandem with the market this spring as fears mounted over the spread of the coronavirus. But Facebook has outperformed amid the market’s rebound from the crash. The ad boycott led to a brief dip in late June. The stock has provided investors with a trailing total return of 19.2% over the past 12 months compared to the S&P 500’s total return of 7.2%.

Facebook Earning

Facebook’s shares received a boost following its Q1 FY 2020 earnings report, which appears to have quelled investors’ fears over how the company would perform during the pandemic. Adjusted EPS rose 21.4%, marking the fastest growth since Q4 FY 2018. Revenue rose 17.6%, but it was the slowest growth in at least the past 17 quarters, continuing a deceleration that began years ago.3

During Q4 FY 2019, Facebook’s adjusted EPS rose 14.1%. Aside from two consecutive quarters of declining earnings in the first half of the year, it marked the slowest earnings growth in at least 16 quarters. Revenue grew 24.6%, just under half the rate at which revenue grew three years earlier in Q4 FY 2016.3 The company’s shares fell on the news, then rebounded in the following weeks before plunging amid the coronavirus-induced market crash.

Facebook’s shares have rebounded since the crash but they have moved mostly sideways since the end of May. For the coming Q2 FY 2020 report, analysts expect a 10.8% decline in adjusted EPS, which would be the worst earnings performance in at least 18 quarters. While EPS fell in two other quarters during that more than a four-year period, the estimated decline in Q2 FY 2020 EPS is far steeper. Revenue is expected to grow 2.1%, the weakest quarterly performance in more than four years

For social media companies like Facebook, monthly active users, or MAU, is a key indicator for tracking the number of unique individual users to visit a site in a one-month period. Facebook has seen steady MAU growth every quarter for at least the last three years. However, there has been a general slowdown in the rate of increase. Year-over-year (YOY) growth in MAU ranged between 15-17% over the four quarters of 2017, 9-14% during 2018, and 8-9% during 2019. Analysts estimate MAU will rise 9.4% in Q2 FY 2020, slightly above the average rate throughout the previous year. This above-average growth may stem from home-bound consumers worldwide sharply boosting their online activity due to the pandemic.3 Despite this short-term uptick, the overall pattern of slower growth is to be expected since Facebook already has a significant global reach and there are a finite number of potential users worldwide.

Facebook

You may not think of Facebook as new and edgy anymore. But you can’t deny its popularity. There are more than 2 billion monthly active Facebook users, with 1.37 billion actively using the social network every day.

It is no surprise, therefore, that many people and businesses try to earn money from Facebook. With such a vast potential audience, it makes good sense.

It can be challenging, though, to make money on Facebook. Because of Facebook’s sheer size, it can be challenging to stand out from the crowd. This is particularly the case now that Facebook only shows a selection of posts in a person’s feed. In fact, probably, the statuses you lovingly craft and upload to your business page will reach no more than 2% of your followers.

Every time somebody opens their Facebook feed the Facebook algorithm goes through four steps to decide which posts it will show that person:

Inventory – the algorithm examines all of the recent statuses shared by the person’s friends and the pages they follow.
Signals – it then takes a look at a whole range of signals based on the user’s past behavior. These include, who made the post, the average time spent on content, post engagement, tagging and comments, how informative the post is, and many other signals. A significant signal from a money-making point of view is that the algorithm weights statuses from people as being more important than posts from pages.
Predictions – the signal attempts to guess how the user will react to a particular story – will they share it, comment on it, read it, or ignore it?
Score – The algorithm generates a Relevance Score for each post, based on the signals and its predictions.
When Facebook assembles a person’s feed, it only shows the posts with the highest Relevance Scores.

We have previously shown how Instagram, which is Facebook-owned, operates a similar scheme in How to Beat the Instagram Algorithm Without Actually Cheating.

Are You a Business, and Influencer, or Just an Ordinary Person?
Facebook is primarily a social network; an online place where people can hang out, socialize, and share things of common interest. This is one of the reasons why it gives posts from someone’s personal account a higher weighting than posts from a page.

Businesses always have to bear this in mind. It will always be easier for people to spread their words on Facebook than it is for companies.

But it is not quite as clearcut as that.

If a person only has a small number of Facebook friends they will be unable to spread the word very far – unless they can share content so profound that people share it multiple times over, and it becomes viral.

On the other hand, if a person can attract a considerable number of supporters and then engage with them regularly, they will find that their posts will appear in many people’s feeds.

So the best way to ensure that people hear what you have to say is to build your support base up to the extent that they consider you an influencer. When you reach that point, it is easy to make money on Facebook.

Business accounts should not be wholly ignored, however. If businesses operate their accounts well and share quality content regularly, Facebook will recognize their efforts and increase their Relevance Scores.

And then, of course, there is Facebook Advertising, which can help give an extra push to the reach of posts. We have recently looked at How much do Facebook Ads Cost – the true Cost of Running Facebook Ads.

Build Your Audience First
The whole reason that influencers are successful on Facebook is that they have already gone through the process of building a following.

You need to build up your expertise on Facebook by sharing a string of excellent posts – interesting links, images, and updates. To really succeed as an individual you should build up an area of interest where you can become recognized as an expert.

While businesses may choose to use influencers to market for them, they will probably also want to build up some form of Facebook presence themselves. Over time they can use it to help people recognize them as experts in their niche. Starbucks has shown how to do this well, and their page has 37 million followers.

You may not think of Facebook as new and edgy anymore. But you can’t deny its popularity. There are more than 2 billion monthly active Facebook users, with 1.37 billion actively using the social network every day.

It is no surprise, therefore, that many people and businesses try to earn money from Facebook. With such a vast potential audience, it makes good sense.

It can be challenging, though, to make money on Facebook. Because of Facebook’s sheer size, it can be challenging to stand out from the crowd. This is particularly the case now that Facebook only shows a selection of posts in a person’s feed. In fact, probably, the statuses you lovingly craft and upload to your business page will reach no more than 2% of your followers.

Every time somebody opens their Facebook feed the Facebook algorithm goes through four steps to decide which posts it will show that person:

Inventory – the algorithm examines all of the recent statuses shared by the person’s friends and the pages they follow.
Signals – it then takes a look at a whole range of signals based on the user’s past behavior. These include, who made the post, the average time spent on content, post engagement, tagging and comments, how informative the post is, and many other signals. A significant signal from a money-making point of view is that the algorithm weights statuses from people as being more important than posts from pages.
Predictions – the signal attempts to guess how the user will react to a particular story – will they share it, comment on it, read it, or ignore it?

Score – The algorithm generates a Relevance Score for each post, based on the signals and its predictions.
When Facebook assembles a person’s feed, it only shows the posts with the highest Relevance Scores.

We have previously shown how Instagram, which is Facebook-owned, operates a similar scheme in How to Beat the Instagram Algorithm Without Actually Cheating.

Are You a Business, and Influencer, or Just an Ordinary Person?
Facebook is primarily a social network; an online place where people can hang out, socialize, and share things of common interest. This is one of the reasons why it gives posts from someone’s personal account a higher weighting than posts from a page.

Businesses always have to bear this in mind. It will always be easier for people to spread their words on Facebook than it is for companies.

But it is not quite as clearcut as that.

If a person only has a small number of Facebook friends they will be unable to spread the word very far – unless they can share content so profound that people share it multiple times over, and it becomes viral.

On the other hand, if a person can attract a considerable number of supporters and then engage with them regularly, they will find that their posts will appear in many people’s feeds.

So the best way to ensure that people hear what you have to say is to build your support base up to the extent that they consider you an influencer. When you reach that point, it is easy to make money on Facebook.

Business accounts should not be wholly ignored, however. If businesses operate their accounts well and share quality content regularly, Facebook will recognize their efforts and increase their Relevance Scores.

And then, of course, there is Facebook Advertising, which can help give an extra push to the reach of posts. We have recently looked at How much do Facebook Ads Cost – the true Cost of Running Facebook Ads.

Build Your Audience First
The whole reason that influencers are successful on Facebook is that they have already gone through the process of building a following.

You need to build up your expertise on Facebook by sharing a string of excellent posts – interesting links, images, and updates. To really succeed as an individual you should build up an area of interest where you can become recognized as an expert.

While businesses may choose to use influencers to market for them, they will probably also want to build up some form of Facebook presence themselves. Over time they can use it to help people recognize them as experts in their niche. Starbucks has shown how to do this well, and their page has 37 million followers.

 

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