Facebook boosted by mobile ad growth

1 February 2013

NEW YORK: Facebook, the social network, has seen its mobile advertising revenues more than double, reflecting a belief that this channel will be a "great opportunity" going forward.

The firm saw its total ad revenues increase by 41% year on year, to $1.3bn, in the last three months of 2012. Mobile delivered 23%, or $306m, of this figure, up from 14%, or $141m, quarter on quarter.

"Today, there's no argument: Facebook is a mobile company," Mark Zuckerberg, its chief executive, told analysts on a conference call. "I think more people are starting to understand that mobile is a great opportunity for us."

Facebook reported that 680m users logged on from a mobile device in December 2012, a 57% lift on an annual basis, and a trend which made 2012 a "big year" for Facebook, Zuckerberg said.

"We made this big transition where now there are more people using Facebook on mobile everyday than on desktop," he asserted.

"This was challenging for us to navigate since we started off the year with apps that weren't as high quality as we wanted, and no ads in our apps at all."

Facebook addressed the former issue by redesigning its apps and the latter by introducing ads into users' News Feeds on wireless devices, a move Zuckeberg said "barely affected" engagement levels.

"We thought that we can make this work over time without a big impact if we spent a long time tuning the ad, but the numbers turned out even better than we thought without much tuning," he argued.

The company also revealed that 65% of marketers running ads in the News Feed now choose to do so on both desktop and mobile, measured against 50% in the third quarter of last year.

According to Zuckerberg, the insertion of ads into News Feeds on PCs and mobile only led to a 2% reduction in likes and comments, compared with a 50% improvement across its pages in the last year.

"The next thing we're going to do is get really good at building new mobile-first experiences," he said. "If we do this well, we should be able to bring even more relevant content and connections to more people and continue to deepen their engagement."

Walmart, the retailer, ran 50m mobile ads on Facebook during the Thanksgiving weekend, and the site is hoping the increased size of the mobile audience will mean many other brands do the same.

Data sourced from Seeking Alpha; additional content by Warc staff