PALO ALTO: Facebook, the social network, is facing a variety of challenges to its advertising model as more users log on via mobile phones, the company has admitted.

The online giant has updated an SEC filing, issued in preparation for its forthcoming IPO, and spoke of the risks resulting from growing mobile use given its "unproven" ability to monetise this space.

Overall, its platform boasted 901m monthly active users as of March 2012, up by 33% year on year, and 526m daily active users, a 41% improvement during the same timeframe.

Turning to mobile, some 500m people accessed its pages through this route as of April 2012, an expansion topping 12m month on month.

"We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered," the company said.

In evidence of this, it reported that the amount of ads it delivered climbed by 35% in the first quarter, when daily average user levels leapt by 41% and the monthly equivalent rose 33%.

"Based upon our experience in the second quarter of 2012 to date, the trend we saw in the first quarter of DAUs increasing more rapidly than the increase in number of ads delivered has continued," the filing added.

This may be because Facebook featured no ads on its mobile service until March 2012, when it added sponsored stories to the News Feeds of users.

"We believe this trend is driven in part by increased usage of Facebook on mobile devices where we have only recently begun showing an immaterial number of sponsored stories in News Feed," the filing argued.

Facebook also quoted a forecast from IDC, the insights provider, predicting that mobile adspend would reach $17.6bn worldwide in 2015, compared with $1.5bn in 2010.

Factors fuelling this favourable shift are likely to include changing habits in mature markets like the US and Western Europe, alongside rising mobile web usage in emerging markets, where handsets are often the primary means of going online.

Facebook's advertising revenues rose by 69% to $3.2bn in 2011. This pace of growth slowed slightly, to 37%, in the first quarter of 2012, when total ad sales stood at $872m.

Data sourced from SEC; additional content by Warc staff