Facebook’s ad revenue soars
NEW YORK, USA
Facebook grew its advertising revenue by 64 per cent in the third quarter, helped by a boost in mobile ads that are becoming an increasingly large chunk of the social networking giant’s overall advertising business.
The steady increase indicates that Facebook has succeeded in steering advertisers to its mobile platform at a time when most of its users are using Facebook on phones and tablets. Investors were initially worried about the desktop Web era-born company’s ability to succeed in mobile advertising, but those concerns are long gone.
Advertising revenue at the company totalled US$2.96 billion. Mobile ad revenue, a closely watched figure, was US$1.95 billion, or 66 per cent of Facebook’s total advertising revenue for the quarter. That’s up from 62 per cent in the second quarter and 59 per cent in the first three months of the year. The 10-year-old company began offering mobile ads in 2012.
Now, Facebook is expanding into highly lucrative video ads, and earlier this year re-launched Atlas, a tool for marketers to better target people across “devices, platforms and publishers” and to measure how well the ads work.
The Atlas move and the acquisition of LiveRail, an online video advertising platform signal that an “important shift is under way at Facebook,” says Debra Aho Williamson, an analyst at research firm eMarketer. Facebook is “becoming much more ambitious in offering digital services far beyond what the company was initially created to do as a social network.”
The company has been on a roll lately, and its stock hit an all-time high of US$81.16 yesterday before the results came out. That’s more than double its initial public offering price of US$38. Both the troubled IPO and the company’s lagging stock price seem like a distant memory. Still, Facebook has had to be vigilant in attracting new users, especially outside the US, and ensuring that existing members return day after day.
Facebook had 1.35 billion average monthly users as of September 30, an increase of 14 per cent from a year earlier. Daily users totalled 864 million, up 19 per cent. Mobile monthly active users, meanwhile, were 1.12 billion, up 29 per cent from a year earlier.
While Facebook has been growing its share of the worldwide digital advertising market, it’s still a long way from catching up to rival Google Inc. In 2013, Facebook had a nearly six per cent share of the market compared with Google’s 32 per cent, according to eMarketer. This year, Facebook is expected to grow its slice to nearly eight per cent, while Google’s should decline slightly, to just below 32 per cent.