Facebook Got More Revenue On LOWER Sales And Marketing Costs In Q2

Facebook’s marketing and sales costs—the money it spends on ads and its salesforce—went down as a percentage of ad revenue in Q2, if you deduct the stock compensation expenses included in that line on the income statement.

That means Facebook grew its revenues this quarter, up 32% to $1.18 billion, but spent less on its ad sales force to get that increase. Its promo costs are up year on year, but they’re flat sequentially from Q1—meaning that they’re down on a proportional basis.

Facebook reported it spent $392 on sales and marketing, but that $232 million of that was stock-based compensation. So it actually spent about $160 million on promotion and ad sales. (In previous periods, stock-based comp within marketing and sales was negligible.)

Here’s what that looks like in a chart, with Q2 2012 represented without the stock costs (click to enlarge):


Photo: Facebook

Disclosure: The author owns 30 shares of Facebook stock.


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