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Mobile ad revenue surge is Facebook?s data-sharing reward


The social networking site?s share of mobile-based ad revenue climbed to 73 percent in the first quarter from 69 percent in the fourth quarter and 59 percent in the year-ago first quarter as mobile monthly active users jumped 24 percent to 1.25 billion, and mobile daily active users surged 31 percent to 798 million. The results suggest that as businesses follow consumers? shift to mobile, Facebook is reaping the benefits of helping marketers leverage mobile to drive engagement.

?We have a great platform to do creative storytelling on mobile and we have that in a way that no one else does,? said Sheryl Sandberg, Facebook?s chief operating officer, in a conference call to discuss the latest quarter?s financial results. ?Our mobile ad product is so integrated into the user experience and provides real creative flexibility that people have a way to reach people on mobile, and that?s become increasingly important in telling the stories that drive their business.
 
?We have the ability to improve the relevance of marketing, which will make it better for consumers and increase returns for marketers,? she said.

Growing popularity
Monthly active users totaled 1.44 billion, up 13 percent. Daily active users came to 936 million, up 17 percent.

Revenue from advertising came to $3.32 billion, up 46 percent from a year ago. 

Teaching marketers to be effective on Facebook.

Net revenue came to $3.54 billion, missing the company?s projected figure of $3.56 billion on what Facebook, Menlo Park, CA, said was the effect of a stronger United States dollar making money earned overseas worth less when translated back into dollars. Earnings per share came to 42 cents, beating expectations.

Reflecting Facebook?s growing popularity, the site and its Instagram video-sharing site receive one out of every five minutes spent on mobile in the United States, Ms. Sandberg said.

Facebook strived to help marketers leverage mobile ads effectively in the quarter by introducing several products, including the Ads Manager app, which lets advertisers manage Facebook ads on the go on mobile.

It also introduced Blueprint, which offers training on everything from campaign optimization and how to use video on Facebook to effective ad measurement solutions.
 
?We?re already seeing more marketers managing their activity on mobile,? Ms. Sandberg said.

Facebook had 30 million active business pages in the quarter.

?More and more small businesses are using our free pages product,? Ms. Sandberg said. ?We remain focused on converting these page owners into advertisers.?

Eighty percent of new Facebook advertisers start with entry-level tools.

Also launched in the quarter were a product ads service, which lets businesses promote their entire product catalog across all consumer devices and a carousel ads feature, which lets brands post multiple images that users can scroll through by swiping their finger across a phone?s screen.

Facebook also released an ad relevance score to let marketers measure how relevant an ad is to a target audience, based on how the ad is performing and other factors. 

Although Facebook?s first quarter was big with year-over-year mobile user and ad revenue growth, its challenges over the next few months will be continuing its revenue growth trajectory and evolving its advertiser demand from app download marketers to brand advertisers.

"Click-to-play video will be important for them as an ideal ad product to serve within Facebook News Feed inventory, as well as outside their platform via their mobile ad network," said Justin Choi, CEO of Nativo.

In another challenge, the migration of consumers' time from social media to messaging will likely chip away at Facebook's dominance in the mobile market.

?The networking effects aren't as strong in this medium vs. social media,? said Christian Brucculeri, CEO of Snaps. ?Increasingly, consumers are spending their time and sharing content in private messaging conversations, and this creates challenges for Facebook. 

?They've built an incredible messaging app, but it's arguably less relevant in the space than places like iMessage.?

Mobile commerce
Facebook's expansion of its product ad capabilities positions it more strongly as an enabler for mobile commerce.  

?While Google moves increasingly native in shopping and commerce-driven verticals, Facebook may have the opportunity to leapfrog Google as commerce moves increasingly mobile,? said Jonathan Opdyke, CEO of HookLogic.

Product-ad tools on Facebook.

Despite multiple product launches, Facebook?s challenge remains making sure marketers are educated on how to get the best results from the platform.

?Offerings like the ad relevance scores that Facebook implemented back in February are essentially Facebook doing everything it can to present value to advertisers, and judging by their steady growth in revenue it?s working,? said Ken Wisnefski, founder-CEO of Webimax. 

Final Take
Michael Barris is staff reporter on Mobile Marketer, New York