FaceBook Talks up Mobile Plans

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Posted 5 years ago

Mark Zuckerberg has spoken before about how important mobile is in the future of FaceBook, and the subject was once again the big talking point at the Q3 earnings call with Wall Street analysts and investors as FaceBook sprung a surprise by announcing that mobile advertising revenue had grown several times in the third quarter.

“I think our opportunity on mobile is the most misunderstood aspect of FaceBook today,” Zuckerberg told investors. “Long-term I think we’re going to monetize better for the amount of time spent on mobile than on desktop.”

People accessing FaceBook on a mobile device spend more time on the site than they do accessing the social network on a desktop, Zuckerberg said at the call. What’s more is that they come back more regularly, with some 70 percent of mobile users returning to FaceBook daily compared to just 20 percent of desktop users.

“I want to dispel this myth that FaceBook can’t make money on mobile,” the CEO said to analysts, and he certainly has the numbers to convince them.

During the last quarter, 1.01 billion users accessed FaceBook, which was a 26 percent increase. 604 million of those users accessed the site on a mobile device – a massive 61 percent year-upon-year increase.

According to Reuters, mobile ads in the third quarter totalled $150 million, up from an estimated $40 to $50 million in the second quarter and virtually nothing in Q1. That equates to 14 percent of total advertising revenue which is surely enough to convince investors that FaceBook is coming to grips with mobile and starting to figure out how to make money.

FaceBook’s COO Sheryl Sandberg has said that the company will continue to develop new products to increase mobile advertising revenue. One of these new products can already been seen in the new FaceBook smartphone apps with targeted ads appearing in news feeds in a similar way to the method used by Twitter. According to CFO David Ebersman, as published by The Register, “FaceBook can charge a premium for such targeted ads, the average price paid per ad during the third quarter was up 7 per cent from the previous year’s quarter.”

FaceBook only began trying to make money from mobile in March, and while only 14 percent of the 86 percent overall advertising revenue is from mobile, FaceBook is still in its infancy of tapping mobile ads and we are only likely to see quarterly increases from now on. As Mark Zuckerberg says, “We’re just getting started on this.”

– Anthony Carter

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