Image source: Facebook.

Last quarter, Facebook (META 0.35%) users saw 49% more ads than they did in the second quarter of last year. But CFO Dave Wehner made some comments that indicated that he expects the growth in ad impressions to slow down over the next year, negatively affecting Facebook's revenue growth rate. The company managed to grow its revenue 59% year over year in the second quarter, and it's up 56% in the first six months of the year.

Wehner told analysts on the company's earnings call that Facebook has nearly saturated its ad load, and it "will be a less significant factor driving revenue growth after mid-2017." Analysts are currently expecting Facebook to grow revenue 35% next year, a significant slowdown from the first six months of 2016, and they have yet to fully digest the ad-load news. But there are several factors that could help Facebook make up for the lack of ad-load growth.

Growing impressions without increasing ad load

When asked if he could break down how much of the ad impression growth was driven by ad load, Wehner said he wouldn't but pointed to the fact that there are really only three drivers: growth in users, growth in engagement, and ad load.

Even at 1.71 billion monthly users, Facebook is still growing its user base at a strong clip. Its user base is up 15% year over year and its daily audience is up even more at 17%. The outsize growth in daily users is telling of the fact that user engagement continues to climb as well. On the earnings call, CEO Mark Zuckerberg said that time spent per user increased by double-digit percentages across Facebook, Instagram, and Messenger.

These factors are multiplicative. If there are 17% more users spending 10% more time per day on Facebook, they're going to see roughly 29% more ads. If Facebook can continue to grow active users and engagement at those rates, it should be able to continue increasing its ad supply for some time.

Ads on Instagram are just getting started. Image source: Facebook.

Of note, Wehner told analysts that ad load on Instagram is below Facebook's flagship product. That's to be expected, considering it just opened its advertising to everyone in the third quarter last year. Growth in Instagram's ad load could help offset the saturation on Facebook.

Growing ad prices

The other major factor for Facebook to grow revenue is increasing its average ad price. Even with the significant growth in ad supply, Facebook has continuously managed to increase its average price per ad. Last quarter, ad prices were up 9% year over year.

There are a few factors affecting average ad price, including the shift to mobile where Facebook doesn't show lower-price right-hand column ads. As that shift slows, however, increases in advertiser demand will become an even bigger driver. Wehner noted that "advertiser demand was particularly strong in Q2 across a broad range of verticals and advertiser objectives."

Additionally, as ad load and the percentage of ad impression coming from Instagram increases, it could have a positive impact on average ad price. The average ad price on Instagram is reportedly much higher than the average price per ad on Facebook.

Other sources of revenue

One of the most important factors for Facebook's future revenue growth is that it has several products with massive scale that it has yet to monetize in any meaningful way. For example, both Messenger and WhatsApp have over 1 billion users. Zuckerberg said users conduct more than 2 billion searches on its flagship platform every day. Additionally, the Facebook Audience Network is still in its relative infancy, despite its billion-dollar run rate, representing another area of revenue growth for Facebook.

Facebook Search represents yet another opportunity. Image source: Facebook.

Some of these products are harder to monetize than others. Instagram was a relatively easy product to monetize because it functions similarly to Facebook. Messenger and WhatsApp, however, require more innovative ideas and business models to unlock value. Facebook assuredly has tons of research and development going into solving those problems: R&D expense increased 37% last quarter.

As Facebook manages to improve the monetization of its secondary products, it should inject another round of revenue growth into the company. Although Facebook will face some pressure from a lack of ad-load growth, it still has plenty of revenue growth drivers. With the continued growth in users, engagement, and average ad prices, meeting analysts' expectations of 35% revenue growth next year seems well within reach, and growth from Facebook's other properties could help it surpass those expectations.