T-Mobile is one of first advertisers to run a 1-minute video ad.
Advertising displayed on mobile devices accounted for more than half, or $1.242 billion, of ad revenue for the social network in the fourth quarter, as the social network’s overall advertising revenue grew more than 76%. About a quarter of Facebook users access it exclusively through mobile devices.
Mobile ads accounted for more than half of Facebook Inc.’s advertising revenue in the fourth quarter of 2013, the social network reported this afternoon. That’s the first time mobile ads have accounted for the majority of the social network’s ad revenue.
Facebook reported $2.344 billion in advertising revenue in the fourth quarter, of which $1.242 billion came from mobile ads. That’s a 41.0% increase from $881.0 million in mobile ads in the third quarter.
The percentage of Facebook’s ad revenue stemming from mobile ads is growing quickly. Facebook says that 53% of its ad revenue in the fourth quarter stemmed from ads it presented to consumers on mobile devices, up from 49% in the third quarter and 23% in the same period a year earlier.
The strong growth of Facebook’s mobile advertising demonstrates that the social network has adjusted its business model to account for the fact that more than three-quarters—945 million—of its 1.23 billion users access Facebook from a mobile device each month. And 296 million users access Facebook only from mobile devices each month, the social network says. That’s why Facebook spent much of last year refashioning itself into a mobile-first platform.
"If 2012 was the year we turned our core product into a mobile product, then 2013 was the year when we turned our business into a mobile business," said Mark Zuckerberg, Facebook founder and CEO, today during a conference call with analysts. "I expect 2014 will be the year when we begin to deliver new and engaging types of mobile experiences."
Sheryl Sandberg, Facebook's chief operating officer, said that Black Friday was Facebook's single-biggest mobile ad revenue day in the quarter. When people are shopping in stores, they are on their phones, she said, and when they are on their phones, they are on Facebook.
She pointed to a recent study by Millward Brown Digital that showed that consumers using their smartphones while shopping in a bricks-and-mortar store are four times more likely to be looking at Facebook than any other app or search. The implication is that to reach those shoppers, marketers need to be using Facebook's mobile ad units.
For the quarter ended Dec. 31, Facebook reported:
- $2.585 billion in total revenue, a 63.1% increase from $1.585 billion in the same quarter of 2012.
- $2.344 billion in advertising revenue, a 76.4% increase from $1.329 billion in the same quarter of 2012.
- U.S. advertising revenue of $1.068 billion, up 69.3% from $631 million in the same period a year earlier.
- Average revenue per worldwide user of $2.14, up nearly 39.0% from $1.54 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 $6.03 per user, up 47.8% from $4.08 a year ago.
- The social network earned $523 million during the quarter, compared to $64 million a year earlier.
- 1.23 billion monthly active users, up 16.0% from 1.06 billion a year earlier.
- 945 million mobile monthly active users, up nearly 39.0% from 680 million in 2012.
- 757 million daily active users in December, up 22.5% from 618 million a year earlier.
- 556 million daily active mobile users in December, up 48.7% from 374 million in 2012.
For all of 2013, Facebook reported:
- $7.872 billion in total revenue, a 54.7% increase from $5.089 billion in 2012.
- Advertising revenue of $6.986 billion, up 63.3% from $4.279 billion in 2012.
- U.S. advertising revenue of $3.695 billion, 45.9% jump from $2.532 billion a year earlier.
- A profit of $1.50 billion, up from $53 million a year earlier.