Facebook Inc.’s revenue in the third quarter of the year jumped 59% from the same period a year ago, thanks largely to the continued growth in ad revenue from the network’s mobile advertising.
The social network reported today that 84% of its Q2 advertising revenue stems from mobile ads, which appear on Facebook, Instagram and across Audience Network, which is its mobile ad network. Given that advertising makes up more than 97% of Facebook’s revenue, the roughly $5.725 billion that retailers and other marketers spent on mobile advertising during the quarter made up nearly 82% of the company’s overall revenue. That’s a major increase from the same period a year earlier, when mobile ads accounted for 74% of the company’s total revenue.
“People have shifted to mobile, and we remain focused on helping businesses catch up,” said Sheryl Sandberg, Facebook’s chief operating officer. “We know that marketing shifts take time. The first TV ads showed people standing in front of microphones reading their radio ads. Similarly, many of the first mobile video ads were TV ads dropped into mobile. Ads optimized for each platform often perform better, so marketers are increasingly tailoring their creative for mobile.”
A growing share of those mobile ads are video ads. In the past month alone, more than 3 million small businesses have posted a video on Facebook, including organic posts and ads, Sandberg said. In part, that’s the result of the social network’s aggressive pushing video—video organically shared by brands (both live and prerecorded) and video ads—for more than a year.
“People are creating and sharing more video, and we think it’s pretty clear that video is only going to become more important,” said Mark Zuckerberg, Facebook founder and CEO. “So that’s why we’re prioritizing putting video first across our family of apps and taking steps to make it even easier for people to express themselves in richer ways.”
Among the ways Facebook is pushing video is through Facebook Live and the Snapchat Live Stories-like Instagram Stories.
For the third quarter ended Sept. 30, Facebook reported:
- $7.011 billion in total revenue during the quarter, a 55.8% increase from $4.501 billion in the same quarter a year ago.
- $6.816 billion in advertising revenue, a 58.5% increase from $4.299 billion.
- Mobile advertising represented approximately 84% of ad revenue during the quarter, up from 78% a year ago. That would indicate mobile ad revenue was approximately $5.725 billion during the quarter, a 70.7% increase compared with roughly $3.353 billion a year earlier.
- $3.89 in average advertising revenue per worldwide user, up 37.5% from $2.83 a year ago. Facebook calculates average revenue per user as its total revenue during a 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.
- $15.08 in average advertising revenue per user in the U.S. and Canada, up 52.9% from about $9.86 a year ago.
- Net income was $2.379 billion, up 165.5% from $896 million.
- 1.179 billion daily active users, an increase of 17.1% compared with 1.007 million last year.
- 1.788 billion monthly active users, up 15.7% from 1.545 billion.
- 1.091 billion mobile daily active users, an increase of 22.0% from 894 million.
- 1.658 billion mobile monthly active users, a 19.7% jump from 1.385 billion.
- Of those monthly active users, 1.055 billion accessed Facebook only through mobile apps or mobile versions of its web site. That’s up 45.1% from 727 million a year ago.
For the first nine months of the year, Facebook reported:
- $18.829 billion in total revenue, a 55.8% increase from $12.087 billion in the same period a year ago.
- $18.220 billion in advertising revenue, a 59.2% increase compared with $11.443 billion.
- Net income was $5.944 billion, up 179.5% from $2.127 billion.