Facebook reports a big quarter for mobile ads

The business that was non-existant last year is now a major revenue driver and possibly the future of the company.

Facebook is making money, and a good chunk of it is already coming from advertising on phones.

The world's largest social network said Wednesday it made a US$219 million (A$213.5m) profit in the first quarter on nearly $1.5 billion in total revenue, up 38 percent year-on-year. (Profits fell just short of Wall Street expectations.)

Not surprisingly, advertising sales accounted for most of that revenue (85 percent or $1.25 million), but somewhat more surprising is that advertising on mobile devices accounted for 30 percent of the ad revenue. A year ago, Facebook had no mobile ad revenue.

Reports of Facebook's declining popularity are also overblown, according to first-quarter numbers. Though the social network is obviously not growing at the blazing speed it once was, it still draws more than 1 billion monthly active users. Mobile monthly active users topped 750 million as of March, a 54 percent jump over last year.

Mobile, mobile, and more mobile

Facebook has made it clear that mobile is the future, and the healthy growth of its mobile ads business signifies success in that market, at least for now. The company also threw its presence behind Facebook Home, a launcher for Android that brings the Facebook experience to your smartphone's home screen. Facebook Home had more than 500,000 installationsin its first week of release, but reviews of the launcher have been mixed.

Both Facebook Home and the HTC First, the only phone that comes with Facebook Home pre-installed, were released in the second quarter, so the success of those products is still unknown.

CEO, Mark Zuckerberg, said during the company's earnings call that Facebook's primary focuses this year are mobile, building a "better monetisation engine" (or fine-tuning advertising), and introducing services that take advantage of the recently unveiled Graph Search.

Graph Search, which just rolled out to smartphones last month, makes it easy for you to find people based on their job, location, and likes, but the new search engine also makes it easy for advertisers to target Facebook users based on the same.

Zuckerberg said Home and Graph Search, are "long-term investments" that are "important areas for us to focus on."

Zuckerberg also noted Facebook hasn't been promoting Home as heavily as it plans to in the future. The Facebook app doesn't encourage Home installation, for example, but that will soon change.

Facebook in the first quarter launched a slew of products to help companies target and market to users more effectively. As Facebook continues to steer toward mobile, expect more ads that are based on what you like, where you live, and what you do. You can also expect to them to be more visually appealing.

Despite the strong earnings and progress in mobile, Facebook still must work to prove its worth to advertisers.

"Brands got very used to TV, and they got very used to search," said COO, Sheryl Sandberg, during the earnings call. "We are a third thing."

Join the newsletter!

Error: Please check your email address.
Show Comments

Blog Posts

Innovations in retail will bring creative and technology closer than ever

While approaching a customer in a shop and asking what you can help them with is Retail 101, how many of us actually enjoy being approached? Generally, you have to give the forced, fake smile and say, “Just browsing, thanks,” while screaming on the inside, “just leave me alone!” Maybe it’s just me?

Jason Dooris

CEO and founder, Atomic 212

There’s a brand in my digital soup

Not a day passes by in the life of business executives where digital innovation or the prospect of disruption is not front of mind. This in turn, drives an unrelenting flow of questioning, discussion and strategy papers.

Jean-Luc Ambrosi

Author, marketer

Can marketers trust agencies again?

Unless you’ve been marketing under a rock, you’ll probably have questioned whether your media agencies are offering you transparency.

Nic Halley

Founder and managing director, Mindbox

Nice post Brad! very useful information. The retail stores are really mean for every brand I am agree with you. Now Online Service Market...

Srialto

The rise of online retail marketplaces and what they mean for brands

Read more

Minor correct Nadia, just wanted to clarify that the "Marketo consultants" that did this work, were actually Hoosh consultants

Fab Capodicasa

What it's taking for Edible Blooms to grow a stronger personalisation strategy

Read more

Im not surprise though, been in the industry for couple of years and I feel and see it with my tow eyes how eCommerce platforms innovated...

Jason Smith

Australia Post earmarks $20m for Australian ecommerce innovation investment

Read more

For marketers that are "going Agile" I recommend using Ravetree. It's a really powerful suite of tools for Agile project management, reso...

Janice Morgan

7 ways to run your marketing department like a software startup

Read more

Over the years very part of our lives has become technological. That’s why I am not surprised to see that Australian home loans are going...

GreatDayTo

Why Aussie Home Loans is embracing digital transformation

Read more

Latest Podcast

More podcasts

Sign in