Target and Toys R Us posted overall sales declines during the holidays.
Mobile ads contributed $881 million in ad revenue to the social network’s coffers.
Mobile ads accounted for nearly half of Facebook Inc.’s advertising revenue in the third quarter, the social network reported today. Facebook reported $1.798 billion in advertising revenue in the third quarter, of which $881.0 million came from mobile ads.
The percentage of Facebook’s ad revenue stemming from mobile ads is growing quickly. Facebook says that 49% of its advertising revenue in the third quarter stemmed from ads it presented to consumers on mobile devices, up from 41% in the second quarter. That means mobile ad revenue increased 34.4% quarter over quarter from $655.6 million in Q2.
Facebook has spent much of this year refashioning itself into a mobile-first platform to address investors’ concerns that its revenue growth would trail off as consumers increasingly accessed the social network via smartphones and tablets. Those efforts appear to have paid off as Facebook and Instagram, which the social network bought in 2012, account for one in five minutes U.S. consumers spend online on mobile devices, according to web measurement firm comScore Inc.
For the quarter ended Sept. 30, Facebook reported:
- $2.016 billion in total revenue during the quarter, a 59.7% increase from $1.262 billion in the same quarter of 2012.
- U.S. advertising revenue in the third quarter grew 54.6% to $832 million, up from $538 million in the same period a year earlier.
- The social network generated average revenue of $1.72 per worldwide user in the third quarter, up 33.3% from $1.29 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.
- In the United States and Canada the average revenue per user was $4.85 per user, up 42.6% from $3.40 a year ago.
- The social network earned $425 million during the quarter, compared to a $59 million loss a year earlier.
- 1.19 billion monthly active users, up 17.8% from 1.01 billion a year earlier.
- 874 million mobile monthly active users, up 44.7% from 604 million in 2012.
- 728 million daily active users in September, up 24.7% from 584 million a year earlier.
- 507 million daily active mobile users in September, up 54.1% from 329 million in 2012.
- 150 million users of Instagram, the photo-sharing service Facebook bought in 2012.
For the first three quarters of the year, Facebook reported:
- $5.287 billion in total revenue, a 50.9% increase from $3.504 billion in 2012.
- Advertising revenue of $4.642 billion, up 57.4% from $2.950 billion in 2012.
- U.S. advertising revenue of $2.105 billion, 46.6% jump from $1.436 billion a year earlier.
- A profit of $977 million, up from an $11 million loss a year earlier.
"48% of the people using Facebook in any given day are only accessing it from mobile," said Mark Zuckerberg, Facebook founder and CEO, during a conference call with analysts. "That's almost half of the people only using Facebook from their phones, and it's a pretty incredible sign of how Facebook evolved over the last year."
Facebook is increasingly focused on making it easier for marketers to buy ads and measure their impact, said Sheryl Sandberg, chief operating officer.
"We are working in a number of areas to make the ad people see on Facebook better," she said. "More targeted ads are better and we are improving our ad targeting to increase relevance. We are investing in features like Custom Audience and partner categories to improve targeting. These are great tools that are still in their early days and we will continue to invest." Custom Audience is a targeting tool that lets advertisers use information shoppers share with them off of Facebook to target ads on the social network.