Facebook’s mobile strategy muscles in with 73pc Q3 ad revenue jumpNovember 5, 2015 | By Fluent
Publication date 11/5/15
Facebook’s mobile ad revenue totaled $3.4 billion in the third quarter ended Sept. 30, 2015, up 73 percent year-over-year as initiatives such as video and carousel ads resonated with marketers.
With Facebook and Instagram together accounting for one in five minutes on mobile in the United States, the company continues to fine-tune existing offerings and expand into new areas. The company’s focus on building stronger display advertising and video offerings points to its heated competition with Google.
“Video is another area where we continue to make progress,” said Mark Zuckerberg, CEO of Facecbook, during a conference call with analysts to discuss the company’s quarterly results. “On average, there are now more than 8 billion daily video views on Facebook and more than 500 million people who are watching daily.
“To offer even more engaging video experiences, we’ve added live video to our Mentions app for public figures and we now support interactive 360 video in news feed,” he said. “We’ve also rolled out new video tools in pages and we are testing a dedicated video section on Facebook.
“Over the next few years, video is going to be some of the most engaging content online and by continuing to innovate here, we have a chance to build the best place to launch and share video.”
Facebook’s successes in mobile advertising is helping to make this area a larger revenue contributor, accounting for 78 percent of overall advertising revenue during the third quarter, up from 66 percent a year ago.
Overall, Facebook saw a 45 percent jump in advertising revenue for the third quarter for a total of $4.3 billion, compared with $2.9 billion a year ago.
In terms of mobile users, Facebook reported it had 894 million average mobile daily active users in September, up 27 percent from the year-ago quarter. Monthly mobile active users totaled 1.39 billion, up 23 percent.
Overall, Facebook saw 1.01 billion daily active users, up 17 percent, and 1.55 billion monthly active users, up 14 percent.
Facebook’s overall revenue totaled $4.5 billion, up 41 percent.
The numbers point to the success of Facebook’s strategy to engage consumers and attract advertisers on mobile.
“I don’t see any losses [for the quarter]… Facebook is executing brilliantly,” said Jordan Cohen, chief marketing officer of Fluent.
One important area of growth for Facebook in digital advertising is in display, which increased 40 percent year-over-year while Google dropped 19 percent, according to IgnitionOne’s Q3 2015 Digital Marketing report. The cost of Facebook ads also continued to climb, with eCPMs up 33 percent compared to last year, the report found.
Competition between Facebook and Google over the display advertising market promises to continue heat up, with mobile a key area of focus for both.
The strength in display points to Facebook’s success with Custom Audience. However, Google launched a counterstrike in September with Customer Match that could threaten Facebook’s growth in display advertising. Customer Match lets advertisers match their customers’ email data to Google users for enhanced targeting.
One of Facebook’s biggest challenges going forward is waning engagement levels as competition in the social media space continues to grow. Several reports suggest that the percentage of users who regularly post on the social network is declining.
Facebook continues to fine-tune the user experience to make it stickier, for example by adding profile videos ad testing a new version of the Like button that provides more ways to express interest.
Then, of course, there is Google, which is a challenge few other than Facebook could take on.
“Facebook’s biggest challenge will be the new threat introduced by Google’s Customer Match offering which is Google’s first foray into targeting ads based on first-party data and is sure to be a hit with advertisers,” Mr. Cohen said.
“Imagine how powerful it will be to surface search ads to your most engaged customers and their lookalikes when they are in market for a product,” he said. “Facebook has been gaining market share in mobile advertising at Google’s – and others’ expense – so it will be interesting to see these two online advertising giants battle it out in Q4 with their new products having just hit the market in late Q3.”