Facebook adds $1B in ad revenue, with mobile?s share topping 75pc
Facebook tapped into an additional $1 billion in ad revenue during the second quarter compared to a year ago, with mobile?s percentage topping 75 percent for the first time as big brands followed consumers to where they are increasingly spending their time.
Facebook said that ad revenue totaled $3.8 billion for the three months ended June 30, 2015, up 43 percent from the previous year?s total of $2.7 billion. Mobile advertising revenue represented 76 percent of Facebook?s advertising revenue in the second quarter, up from 73 percent in the first quarter and 62 percent a year ago.
?People are spending more time on their mobile devices and on Facebook apps,? said Sheryl Sandberg, chief operating officer at Facebook, during a conference call with analysts to discuss the company?s quarterly results. ?We continue to get more than one out of every five minutes on smartphones in the U.S. and mobile usage is driving our growth globally as well.
?We believe we have the best performing mobile ad product in the market and video is making it even better,? she said. ?With so many consumer videos being watched on Facebook, video ads are a natural part of the News Feed experience.?
More mobile users
Facebook reported that revenue for the second quarter totaled $4 billion, up 39 percent from a year ago.
However, the company?s expenses also continued to grow as it invests in data centers, new hires, virtual reality and other initiatives, resulting in a drop in its net income. For the second quarter, Facebook?s net income was down 9.1 percent for a total of $719 million, or 25 cents per share. In the year-ago period, net income totaled $791 million, or 30 cents per share.
Mobile daily active users totaled 844 million on average in June, up 29 percent. Mobile monthly active users totaled 1.3 billion as of June 30, up 23 percent.
Facebook is expected to account for 16 percent of the mobile ad market this year, placing it second behind Google, which will grab 35 percent of the spend, according to eMarketer.
New opportunities
With Instagram and video expected to deliver even more strength in mobile going forward, it appears Facebook?s mobile-driven fortunes could grow even bigger.
During the second quarter, Facebook add new ad formats and targeting options to Instagram.
As image driven marketing on mobile grows, marketers have a pent up desire to build their presence on Instagram, which research firm eMarketer recently forecast will make $595 million in global mobile ad revenue this year and $1.48 billion in 2016.
Video advertising is another promising area for Facebook, with the platform announcing that it will start sharing ad revenue with video creators as it looks to enhance the quality of the content and encourage advertisers to shift budget away from television. In the first quarter, Facebook said it had 4 billion video views a day. However, the platform continues to pale in comparison with YouTube when it comes to attracting original content.
?Over the coming months, Instagram ads will be available to more advertisers with new formats, better targeting and the ability to buy online as well as through third parties,? Ms. Sandberg said.
?As we ramp Instagram ads, we remain focused on quality and relevance to insure the best experience for users and the best performance for marketers,? she said.
Final Take
Chantal Tode is senior editor on Mobile Marketer, New York