Facebook poised to make deep cuts in Google?s mobile territory
The social networking site has become the model for a successful mobile enterprise, as its local awareness ad service, which allows geo-location targeting to be easily incorporated into advertising strategies and its relaunched Atlas tracking service helped power a 69 percent mobile ad revenue surge in the latest quarter. The results underscored how Facebook is poised to grow as it makes more of its huge storehouse of data available to marketers for precision targeting.
?One of the most important ways we grow is not just by bringing more marketers into Facebook, having them use more of our ad product, but by better targeting,? said operating chief Sheryl Sandberg. ?A more relevant ad is a better ad experience for consumers but also drives a much higher return for marketers.?
Ad revenue in the latest quarter surged 53 percent to $3.59 billion, with mobile ad revenue rising to 69 percent from 53 percent a year earlier. Net revenue surged 49 percent to $3.85 billion. Profit in the latest quarter rose 34 percent to $701 million, or 25 cents a share.
Local Awareness ads promotion.
The results provided more evidence of how Facebook continues to execute well on mobile, excelling in diversifying its mobile ad offerings beyond the strong early success of its app install ads.
Daily active users (DAUs) for December rose 18 percent to 890 million while mobile DAUs for the month were 745 million, up 34 percent. Monthly active users (MAUs) were 1.39 billion as of Dec. 31, a 13 percent increase. Mobile MAUs were 1.19 billion as of Dec. 31, up 26 percent.
?Really hard to identify a misstep or challenge when Facebook continues to be the poster child that the industry uses to define success in mobile,? said Kathy Pattison, vice president of marketing for Fiksu.
?There isn?t any question that Facebook is absolutely killing it in mobile marketing right now, showing how central data driven targeting is to mobile marketing success.
?The only question will be if their momentum is starting to slow as the rest of the industry is jumping in,? she said.
Video grew dramatically during 2014, propelled by global events such as the ALS ice bucket challenge. Facebook video postings per person grew 94 percent in the US and 75 percent globally. Marketers, following the trend, are using more video in their campaigns.
?Looking ahead, the question will be how quickly and efficiently they can scale their video ad revenue,? said Justin Choi, president and CEO of Nativo.
Facebook?s relaunching of its Atlas tracking product is a linchpin in the site?s push for cross device/platform measurement.
?Since the inception of advertising on mobile, there has been a massive pain point for marketers to gather relevant user data without the traditional cookie, which has a low success rate on mobile and doesn?t allow for cross device tracking,? said Assaf Suprasky of Matomy Media.
?Atlas is a major element in the push for cross device/platform measurement and will be a game changer for brands and agencies to reach the right people, more efficiently.?
Facebook also is poised to leap into an opportunity created by marketing dollars lagging consumer time spent on mobile.
?In the U.S., mobile gets 25 percent of consumer media time but only 10 percent of the ad budget,? Ms. Sandberg said.
?For every consumer hour spent on print, marketers spend a dollar. And they spend seven cents per hour on mobile. We have an opportunity to grow.?
Facebook?s value is expected to climb in tandem with the growth in its user base and the accelerating shift of ad spending to digital from traditional outlets.
?As the CEO of digital marketing agency WebiMax, I see our clients shifting ad spending away from Google even to invest those dollars into Facebook,? said Ken Wisnefski, CEO/founder of digital-marketing firm WebiMax.
?The reason is Google pricing for premium placement has become extremely costly and Facebook?s combination for highly focused targeting, lower ad costs, and mobile dominance make them more attractive to savvy marketers.?
Facebook?s audience network, which brings Facebook?s rich targeting to non-Facebook properties, also helped results. The ads deliver a 24 times increase in average revenue per user and opportunities beyond app installs, Ms. Pattison said, citing Fiksu quarterly research.
The Facebook audience network also sees a high number of returning users ? 25 percent higher than display and just 5 percent lower than the Facebook News Feed. The network had one-fifth the cost per purchaser of the news feed.
Although Facebook?s Instagram site is becoming the jewel in Facebook?s crown, critics feel Instagram?s advertising rights must expand beyond a handful of brands for it to realize its potential.
?The question remains as to when ads will be offered to a larger number of marketers," said Nate Elliott of Forrester Research.
Michael Barris is staff reporter on Mobile Marketer, New York