Mobile ads now account for 57% of Facebook’s revenue
Mobile advertising revenue reached $1.66 billion during the second quarter, up more than 150% from Q2 last year.
Facebook’s efforts to attract advertisers and capitalize on consumers’ shift to mobile socializing seem to be paying off. The social network is now bringing in 62% of its ad revenue from mobile advertising, versus 41% this time last year, Facebook announced in its second quarter earnings release today.
That amounts to roughly $1.66 billion in mobile ad revenue during the quarter, a 151.5% increase compared with $0.66 billion a year ago. “We had a good second quarter,” CEO Mark Zuckerberg told analysts on a conference call today. “Our momentum was especially strong on mobile.”
Facebook executives also pointed to its efforts to make ads more relevant to users during the quarter, in addition to tweaks to the newsfeeds aimed at reducing users’ exposure to irrelevant or poor quality content.
“Our goal is to make ads as interesting as your friends’ content on Facebook,” Zuckerberg told analysts.
For the quarter ended June 30, 2014, Facebook reported:
- $2.910 billion in total revenue during the quarter, a 60.5% increase from $1.813 billion in the same quarter of 2013.
- $2.68 billion in advertising revenue, a 67.5% increase compared with $1.60 billion last year.
- Mobile advertising revenue represented approximately 62% of all ad revenue during the quarter, up from 41%. That would indicate mobile ad revenue was approximately $1.66 billion during the quarter, a 151.5% increase compared with $0.66 billion a year ago.
- $2.24 in average revenue per worldwide user in the second quarter, up 40.0% from $1.60 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.
- $6.44 in average revenue per user in the U.S. and Canada, up 49.1% from about $4.32 a year ago.
- Revenue by user location is broken down as follows:
- U.S. and Canadian users comprised 44.9% of total revenue during the quarter versus 46.8% in the same quarter of the prior year. U.S. and Canadian users drove $1.308 billion in revenue, up 54.2% from $848 million.
- European users drove $824 million in revenue, up 63.2% from $505 million. The region comprised 28.3% of revenue in Q2 compared with 27.9% last year.
- Users in Asia drove $431 million in revenue, up 74.5% from $247 million. That’s approximately 14.8% of Facebook’s total revenue versus 13.6%.
- The rest of the world accounted for $347 million in revenue, up 62.9% from $213 million. That’s 11.9% of the total, versus 11.7%.
- Net income was $791 million, up 137.5% from $333 million.
- 829 million daily active users, an increase of 19% compared with 699 million last year.
- 1.32 billion monthly active users, up 14% from the same period last year.
- Mobile daily active users of 654 million on average for June 2014, an increase of 39%.
- Mobile monthly active users were 1.07 billion, a 31% jump.
- Of those monthly active users, 399 million accessed Facebook through mobile apps or mobile versions of its web site. That’s up 82.2% from 219 million.
Zuckerberg and Sheryl Sandberg, chief operating officer, said the company remains focused on three main priorities: capitalizing on consumers’ shift to mobile, growing the number of marketers on Facebook and improving ad products.
For the first half of the year, Facebook also reported:
- $5.412 billion in total revenue, up 65.5% compared with $3.271 billion in the first half of 2013.
- Net income was $1.433 billion, a 159.6% jump from $552 million.
Sandberg shed additional light on Facebook’s recent launch of a Buy button on the social network, and aimed to clear up a misconception that Facebook would start selling products of its own in the near future.
Earlier this month, the social network launched a limited test in the U.S. only of a button placed on marketers’ Facebook posts, she said. The button allows users to buy those marketers’ products directly from Facebook. “I think commerce is really important and a growing importance to our business,” Sandberg told analysts. “But I don’t think people should confuse that with Facebook selling directly. It’s more important that we are driving commerce.”