Agency: Adam & Eve
Advertising was cited as Facebook's driving commercial force, responsible for 85% of its $3.7 billion total revenues last year.
In the filing, Mark Zuckerberg’s social network reported a 42% lift in the number of ads it delivered and an 18% increase in the average price per ad in 2011. The rise in the number of ads delivered by Facebook was said to have been driven primarily by a 39% lift in monthly active users in 2011, to reach 845 million users by 31 December 2011.
Facebook defines a monthly active user as a registered user who has logged in and visited the site or via a mobile device, or taken an action to share content or activity with his or her Facebook friends or connections via a third-party website, in the last 30 days.
Other factors said to have contributed to the rise in Facebook ads include product changes such as its Sponsored Stories and Timeline initiatives, that have "significantly increased the number of ads on many Facebook pages".
The proliferation of ad inventory was "partially offset" by an increase in Facebook’s mobile products, which currently do not carry any ads, and by various product changes implemented in 2011 that had the overall effect of modestly reducing the number of ads on certain pages.
Meanwhile, Facebook also increased its own sales and marketing spend 132% year-over-year in 2011, to $427m.
Overall revenue for the social network was up $1,737m, or 88%, last year. Facebook didn’t disclose the number of shares it plans to sell but valuations between $75 billion and $100 billion are expected.
Outside of advertising, Zynga, the social gaming company built on the Facebook platform, accounts for 12% of Facebook’s revenue.
Facebook's continued international expansion and penetration in markets outside the United States was also apparent, as the US contribution to total ad revenues dropped from 62% in 2010 to approximately 56% last year.
The majority of revenue outside the United States came from customers located in western Europe, Canada, and Australia. Key growth areas in terms of monthly active users were cited as Brazil and India, with 37 million and 46 million MAUs respectively.
In addition to filing Facebook's IPO, Zuckerberg wrote a personal letter to any potential investor, in which he restated the company's guiding "social mission". He said: "We think a more open and connected world will help create a stronger economy with more authentic businesses that build better products and services."
Follow Arif Durrani on Twitter: @DurraniMix
This article was first published on mediaweek.co.uk