It’s safe to say that Facebook Inc., once deemed a laggard in reaching mobile consumers, has made big strides in its push to transform itself into what it calls a “mobile-first” platform.
Advertisers spent $2.48 billion on Facebook’s mobile ads in the fourth quarter, which was about 69% of its total ad revenue during the quarter, Facebook announced yesterday. Marketers are buying more mobile ads because more Facebook users are accessing the social network via smartphones. In fact, 526 million consumers, roughly 38% of Facebook’s 1.393 billion user base, only access the social network through mobile apps or mobile versions of its web site.
The strong mobile numbers helped Facebook’s overall ad revenue grow more than 53% during the quarter compared to the same period a year ago.
For the quarter ended Dec. 31, Facebook reported:
- $3.851 billion in total revenue during the quarter, a 49.0% increase from $2.585 billion in the same quarter of 2013.
- $3.594 billion in advertising revenue, a 53.3% increase compared with $2.344 billion last year.
- Mobile advertising revenue represented approximately 69% of all ad revenue during the quarter, up from 53% a year ago. That would indicate mobile ad revenue was approximately $2.480 billion during the quarter, a 99.7% increase compared with $1.242 billion a year ago.
- $2.62 in average advertising revenue per worldwide user in the fourth quarter, up 35.1% from $1.94 a year ago. Facebook calculates average revenue per user as its total revenue during a given period, divided by the average number of monthly active users at the beginning and the end of the period; that is why the average revenue per user doesn’t equal revenue divided by its number of active users.
- $8.26 in average advertising revenue per user in the U.S. and Canada, up 54.7% from about $5.34 a year ago.
- Net income was $701 million, up 34% from $523 million.
- 890 million daily active users, an increase of 17.6% compared with 757 million last year.
- 1.393 billion monthly active users, up 13.4% from 1.228 billion.
- 745 million mobile daily active users, a 34.0% jump from 556 million.
- 1.189 billion mobile monthly active users a 25.8% jump from 945 million.
- Of those monthly active users, 526 million only accessed Facebook through mobile apps or mobile versions of its web site. That’s up 77.7% from 296 million.
For the full year, Facebook also reported:
- $12.466 billion in total revenue, up 58.4% compared with $7.872 billion to the same period in 2013.
- $11.492 billion in advertising revenue, an 64.5% increase compared with $6.986 billion last year.
- Net income was $2.940 billion, a 96% jump from $1.50 billion.
During a conference call with analysts, CEO Mark Zuckerberg emphasized that with Facebook’s recent acquisitions of virtual-reality company Oculus VR, mobile messaging app WhatsApp, as well as with Instagram, its Messenger messaging app and its other initiatives, Facebook has evolved into more than just a social network. And those efforts are by necessity, he said.
“We need to build products that serve our community and allow people to share different types of content with different audiences,” he said. “We need to offer new services and infrastructure at greater scale, but we need to create new tools and innovate to solve fundamental challenges in the places we want to connect.”
While Facebook has the largest audience, WhatsApp has 700 million active users, Messenger has 500 million and Instagram has 300 million, Zuckerberg said. “These numbers speaks the quality of both products and the size of the opportunity ahead to help billions of people communicate and collaborate,” he said. But, for now, the vast majority of Facebook’s revenue stems from its namesake social network.
The social network’s earnings come a day after Facebook made its latest effort to lure marketers to advertise on its platform by attempting to change how advertisers evaluate its ads’ effectiveness.
Facebook yesterday said that is making its conversion lift tool available to all advertisers who buy ads directly from the social network. The feature lets a marketer understand whether someone who bought a retailer’s product saw a Facebook ad before making his purchase—even if the shopper doesn’t make the purchase right away or buys it in a store and not online.
The tool works by comparing Facebook users who saw the ad with those who didn’t and matching up those users with the retailer’s conversion data, which the merchant must share with Facebook for the system to work. The social network uses the same technology that it uses for its Custom Audience ad targeting tool to ensure the data is kept private. That means that to use the tool a retailer has to use Facebook’s ad-management tool to upload its conversion data. The tool then scrambles that information, creating what cryptographers call a “hash” that can’t be decoded to recreate the individual addresses; Facebook does the same with its users’ information. Facebook then matches up the retailer’s hashes with its hashed user accounts. The retailer can then see whether shoppers who bought an item in a store or online saw its Facebook ads.