While Facebook?s mobile advertising business keeps growing ? mobile represented a whopping 62 percent of ad revenue during the second quarter - the social network could become a victim of its own success, particularly on the application marketing front, as a growing number of competitors come out with their own, often compelling offerings. 

The 62 percent of ad revenue delivered by mobile in the second quarter is up from 41 percent during the same period a year ago and from 59 percent in the first quarter of 2014. Facebook?s new mobile ad network and app install ads drive much of the mobile ad revenue but the company continues to look at ways to broaden its mobile ad business.

?When you think about our mobile ads, I do sometimes think that people think our mobile app install ads are all of the revenue or a great majority of the revenue, and they are not,? said Sheryl Sandberg, chief operating officer at Facebook, during a conference call with analyst to discuss the company?s second quarter financial results. ?They are only a part of the mobile ads revenues.

?Our mobile ads revenue is broad based,? she said. ?We have large brands advertisers, small, direct response advertisers as well as developers using our mobile ads.

?The mobile app install ads which are run not only by developers but also by large companies that want to get people to install apps are growing. They remain a good part of our mobile ads revenue and we are excited about the opportunities there. But we see our opportunities in mobile ads as much broader than just installing apps.?

Mobile growth
Facebook reported yesterday that its overall revenue grew 61 percent for a total of $2.91 billion during the second quarter of 2014. Of that, $2.68 billion came from advertising, a 67 percent jump from the same period a year ago.

Growth in mobile use on Facebook continues to outpace general use, with mobile daily active user increasing 39 percent for a total of 654 million while mobile monthly active users grew 31 percent for a total of 1.07 billion.

In comparison, overall daily active users grew 19 percent for a total of 829 million and monthly active users increased 14 percent for a total of 1.32 billion.

The company also posted a 138 percent increase in net income for a total of $791 million. 

Facebook's mobile offerings includes an ad network.

App install ads
Facebook launched mobile app install ads in late 2012 and the offering quickly took off because it meet an untapped need to help developers drive app downloads. In less than two years, Facebook has driven 350 million app installs, per Fiksu.

However, Twitter recently released its mobile app promotion product suite. Fiksu is a partner, helping clients such as Groupon, Dunkin Donuts and Barnes & Noble drive app downloads from Twitter.

?Over the past 12 months, Facebook has enjoyed a leadership position with respect to performance in the app marketing space,? Craig Palli, chief strategy officer at Fiksu.

?While costs of media were often up to ten times greater on Facebook than other channels, they could command this premium because their cost per purchasing user was 28 percent better than other traffic sources, based on the strength of their segmentation tools,? he said.

?Increasingly, the market is responding with competing offerings that perform similarly to Facebook. Twitter recently launched a very well-performing product, Google is making advancements, and most recently, Opera Mediaworks acquired AdColony. All of these companies have very compelling products of their own, and will definitely represent a challenge to Facebook going forward.? 

Facebook is testing a "Buy" button

More mobile
Facebook continues to advance its mobile offerings to better meet marketers? needs.

This week, Facebook enhanced targeting capabilities for mobile app ads, enabling developers to reach people using specific mobile devices such as a Samsung Galaxy S5, iPhone 5s or an HTC One.

Previously, developers could only target iOS or Android, minimum OS version and Wi-Fi only users.

This should help developers optimize their bids by enabling them to reach the most relevant users and bid separately by device. 

Mobile video
Earlier this month, Facebook acquired video ad network LiveRail, which should help the social network boost is video advertising revenues. 

Facebook has been making a bigger push into video as mobile adoption grows as does the amount of time consumers spend on social media and consuming video content from mobile devices. The social network rolled out video ads earlier this year.

The social network also has its eye on social commerce, having introduced a ?Buy? button recently that enables users to complete a purchase without having to leave Facebook (see story). 

Facebook has also launched a new feature called Save that enables iOS, Android and Web users to store links from News Feed, Facebook Pages for Places, Events, Movies, TV shows and music to a list where they can view them later.

?At a high level, Facebook continues to make advancements and refine its tools to give marketers greater flexibility and more segmentation tools while enhancing the consumer experience,? Mr. Palli said.

?One recent example is the Facebook Audience Network (FAN), which extends Facebook advertising off Facebook properties, giving marketers greater reach and outstanding performance,? he said.

?More recently, Facebook has rolled out a new ad format that not only allows consumers to click on an ad and download an app, but also now allows them to comment on, like or share the ad, thereby extending reach while providing consumers choice and an overall great experience.?

Final Take
Chantal Tode is senior editor on Mobile Marketer, New York