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I am focussed on building passive income through dividend investing. My path to progress is smart saving, sound investing and income through dividends. My blog can be found at financiallyintegrated.com.
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  • My Growth Portfolio: TripAdvisor's Platform Continues To Expand

    TripAdvisor (NASDAQ:TRIP) delivered another good result in Q2 2014 as far as revenue and earnings growth. It continues to provide positive validation on my decision to include it within my growth portfolio and is generally performing in line with my core investment thesis on the stock.

    Market Opportunity

    My central thesis behind my decision to include TripAdvisor within my growth portfolio is that TripAdvisor is a unique destination with an active user community who provide and curate reviews which draw in new users who are looking to consume a service. In TripAdvisor's case, the reviews relate to destinations, accommodation and attractions in various places.

    Overtime, it's my view that people will be less reliant upon going to a specific website to purchase or transact, but will search for places with user feedback on say a hotel, or an attraction, and ultimately complete their purchase on that same portal, rather than going somewhere else to do that. There are very few destinations other for travel oriented services that offer this type of value proposition currently.

    Revenue and profit growth

    Revenue came in at $323M in Q2 2014, a more than 30% improvement from Q2 2013. Revenue trumped most analyst expectations. TripAdvisor earnings missed expectations, largely on the back of higher marketing expenses as the company continues to invest for growth. The company had a profit of $68M or $0.47 per share, missing expectations.

    Site Usage, User Growth and Online Advertising

    The theme that dominated TripAdvisor's earnings was the continued expansion of the platform. TripAdvisor topped 170M cumulative reviews in Q2 2014, with monthly unique visitors growing 25% in Q2 2014, year on year. There was a high amount of site usage from mobile, with more than 50% of site traffic from a mobile device in Q2. TripAdvisor derived $235M from click based advertising, up 28% year on year and $37M from display advertising, up 19% year on year.

    Introduction of Instant Booking

    TripAdvisor has commenced rollout of an Instant Booking feature for its mobile application and mobile website accessible via smartphone during Q2 2014. This feature allows consumers to make hotel reservations without leaving the TripAdvisor experience. While it's still too early to assess how this service has performed, my expectation is that the introduction of this feature will attain significant traction with consumers as a frictionless way to review interesting hotels, and finalize hotel stays all within the same environment,

    Conclusions and Key Takeaways

    TripAdvisor continues to see strong growth and usage from its community of users, with continued growth in user engagement and unique visitors helping to increase the breadth of the platform. This has resulted in good advertising growth. The Instant Buy feature offers significant promise as a frictionless way for users to review and transact within the same environment. I expect this to be a medium term driver of revenues and will be looking for evidence of traction of this feature over coming quarters.

    Tags: TRIP, long-ideas
    Aug 19 7:59 PM | Link | Comment!
  • Facebook Cross Device Targeting Is Big News For Advertisers

    Last week, Facebook (NASDAQ:FB) released an announcement that it would begin measuring conversions on Facebook across apps and devices. While the release didn't meet with a great deal of excitement, this is potentially very valuable to advertisers looking to have better insights and analytics around user behavior. I am positive on Facebook stock and have added it to my growth portfolio. My full investment thesis on Facebook can be found here. This latest announcement adds to my conviction.

    Why is cross device targeting so valuable?

    For traditional desktop users, the existence of a cookie allows advertisers to track user interactions across different web properties by virtue of code that can be embedded in a web page. Unfortunately, no such cookie exists on the mobile device, or tablet device. Thus advertisers face a glaring gap in being able to target relevant users on mobile.

    User actions across multiple devices also can't be linked. This means advertisers may not have the awareness to target users at the most impactful time and thus miss out on possible conversions if they don't have a full understanding of user behavior. For example, a user engaging with Gap while on a tablet device should be a relevant target for advertising while mobile. However an inability to link the tablet device with the specific mobile device user means this user may not be targeted for Gap advertising.

    Facebook helps solve this problem for brands by virtue of the user login. Brands are able to get granular awareness of which users they are tapping into across which device. Thus, brands can buy a specific pool of users relevant to a given campaign and target these users across multiple devices. Importantly, they can do this with a single media buy, and see the results more effectively than if such a buy is spread across a number of different publishers and intermediate agencies.

    Facebook own metrics highlight the extent of "cross device problem" for advertisers. In some recent tracking the company performed, 32% of users who were shown advertisements on mobile converted while on a desktop. Facebook also noted that people were more likely to convert on a different device platform as time passed between viewing the initial advertisement. Not being able to track across multiple devices thus means missed opportunities to convert users.

    Offering brands insights and analytics about user behavior across platform and the ability to track conversions across devices will give brands a more comprehensive picture of user behavior, better insights into overall user conversion and result in more actionable campaigns. To brands, that's of great value.

    Implications on stock

    Facebook's overall value proposition to brands will get a strong boost as a result of cross device targeting that Facebook will be offering. Very few other platforms can offer the breadth of Facebook's audience, matched with the power of cross device targeting all for a single media buy. This should make brands more willing to advertise on Facebook for the greater insights they gain and I expect this to result in a positive boost for Facebook revenues.

    Disclosure: The author is long FB. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

    Tags: FB, long-ideas
    Aug 19 12:50 PM | Link | Comment!
  • My Growth Portfolio: Facebook Continues To Be A Mobile Advertising Story

    Facebook (NASDAQ:FB) delivered another solid result in Q2 2014 as far as revenue and earnings growth. It continues to provide positive validation on my decision to include it within my growth portfolio and is generally performing in line with my core investment thesis on the stock.

    Market Opportunity

    The central thesis behind my decision to include Facebook within my growth portfolio is that Facebook helps brands get granular awareness of specific users moving across multiple devices. Importantly, Facebook helps brands do this with a single media buy, and see the results more effectively than if such a buy is spread across a number of different publishers and intermediate agencies.

    Revenue and profit growth

    Revenue came in at $2.9B in Q2 2014, a more than 60% improvement from Q2 2013. Revenue trumped most analyst expectations. Facebook also reported better than expected earnings with profit of $0.30 per share, exceeding most analyst expectations.

    Mobile Advertising

    The theme that dominated Facebook's earnings for Q2 was strength in mobile advertising, a theme that has been evident for the last few quarters. Mobile revenues more than doubled year over year and accounted for almost 62% of Facebook's total revenue. Equally impressive, Mobile monthly active users (MAU) increased 31.0% year over year to 1.07 billion. Facebook's also had solid overall increase in MAU, with active users up to 14.0% year over year to 1.32 billion. Mobile users now represent a substantial portion of Facebook's total monthly active users.

    Facebook Ad Network (NYSEARCA:FAN)

    Facebook recently started a new business unit which facilitates mobile advertising on 3rd party publisher applications, in a manner similar to what Google (NASDAQ:GOOG) adsense does for publishers today. This new initiative will allow the management of advertising, payment routing and ad targeting on behalf of developers. I'm looking for evidence of any traction that FAN gets in upcoming quarters as another core growth driver for Facebook revenues.

    Conclusions and Key Takeaways

    Facebook has some strong growth drivers in its core business which will continue to propel revenue and earnings higher. Brand interest in having greater control over advertising spending and campaign targeting will see a continued shift away to platforms with direct access to specific user segments, of which Facebook is one.

    Disclosure: The author is long FB. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

    Tags: FB, long-ideas
    Aug 18 8:37 AM | Link | Comment!
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