The e-retailer spends at least 50% of its monthly display ad budget on the highly targeted, data-driven—and often cheap—ad placements using programmatic platforms.
That large mobile user base helped the social network generate roughly $1.336 billion in mobile advertising revenue in the first quarter.
Facebook Inc.’s mobile user base for the first time has topped 1 billion, the social network reported today.
Marketers are increasingly targeting those mobile users with ads on the social network. Facebook says mobile ads accounted for 59% of its $2.265 billion in advertising revenue in the first quarter, which amounts to roughly $1.336 billion. "Mobile continues to be a big driver for us and a big opportunity," said Sheryl Sandberg, Facebook's chief operating officer, today during a conference call with analysts.
She also noted that the social network's mobile ad revenue is "incredibly diverse." However, CEO Mark Zuckerberg did highlight its mobile app install ads, which he called one of its "best-performing ad products." The ad unit, which retailers can use to drive consumers to download their apps, has led to more than 350 million app downloads.
Mobile ads have quickly grown in importance for the social network. For the sake of comparison, mobile advertising accounted for 30% of its total ad dollars in the first quarter of 2013 and 53% of total ad dollars in the fourth quarter of 2013. The rapid growth of mobile advertising is largely the result of the social network refashioning itself into a mobile-first platform over the past few years, Zuckerberg said during the conference call.
For the quarter ended March 31, Facebook reported:
- $2.502 billion in total revenue during the quarter, a 98.3% increase from $1.262 billion in the same quarter of 2012.
- $2.265 billion in advertising revenue in the first quarter, up 81.9% from $1.245 billion in the same period a year earlier. That's the social network's best year over year advertising growth rate in nearly three years.
- $1.039 billion in U.S. advertising revenue in the first quarter, up 88.2% from $552 million in the same period a year earlier.
- $2.00 in average revenue per worldwide user in the first quarter, up 48.1% from $1.35 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.
- $5.85 in average revenue per user in the United States and Canada, up 67.1% from $3.50 a year ago.
- $642 million in earnings during the quarter, up 193.2% from $219 million a year earlier.
- 1.28 billion monthly active users, up 15.3% from 1.11 billion a year earlier.
- 1.01 billion mobile monthly active users, up 34.5% from 751 million in 2012.
- 802 million daily active users in the first quarter, up 20.6% from 665 million a year earlier.
- 609 million daily active mobile users in the first quarter, up 43.3% from 425 million in a year earlier.
- More than 200 million monthly active users of Instagram, the photo-sharing service Facebook bought in 2012.
Facebook continues to exceed Wall Street's "relatively high expectations" and, in the near-term, that growth will likely continue, says Colin Sebastian, an analyst with R.W. Baird Equity Research. "We expect further incremental revenue growth from premium video ads, a mobile ad network, Instagram and global monetization."
Facebook also announced that its chief financial officer, David Ebersman, plans to resign, effective June 1. However, he will stay with Facebook through September to help ensure a smooth transition for his successor, David Wehner, currently the social network’s vice president of corporate finance and business planning.
Wehner joined Facebook in November 2012 from social gaming provider Zynga Inc., where he was the company’s chief financial officer. “David has been a great partner in building Facebook, and I'm grateful for everything he’s done to help make the world more open and connected,” Zuckerberg says.