Facebook?s coffers overflow with mobile ad dollars
Mobile ads brought in 84 percent of the $6.2 billion in advertising revenue generated by Facebook during the second quarter, an increase from 76 percent a year ago that highlights the social media platform?s significant strength in connecting on-the-go consumers with marketers.
Mobile active user growth also outpaced overall growth, underscoring the platform?s increasingly mobile makeup. The quarterly earnings and results easily beat analysts? forecasts, sending the company?s shares up more than 6 percent in after-hours trading.
?We see a world that is video first with video at the heart of all of our apps and services,? said Mark Zuckerberg, CEO of Facebook, during a conference call with analysts to discuss the company?s quarterly results. ?Over the past six months, we?ve been particularly focused on live video.
?Live represents a new way to share what is happening in more immediate and creative ways,? he said. ?This quarter, Candace Payne?s Chewbacca Mask video was viewed almost 160 million times.
?Live is also changing the way we see politics as news organizations and delegates go live from the Republican and Democratic conventions. And we?ve seen in Minnesota and Dallas how Live can shine a light on important moments as they happen.?
Steady user growth
For the second quarter ended June 30, 2016, Facebook reported overall revenues totaling $6.4 billion, up 59 percent from a year ago. Of this total, advertising sales accounted for $6.2 billion, up 63 percent.
Facebook?s net income totaled $2 billion, up 186 percent from $719 million. Diluted earnings per share were $0.71, up 184 percent from $0.25.
Despite concerns that Snapchat may be eating into some of Facebook?s growth, the latter?s user growth is strong, especially on mobile.
Mobile daily active users grew 22 percent for a total of 1.03 billion. Monthly mobile active users grew 20 percent for a total of 1.57 billion.
Overall, daily active users grew 17 percent for a total of 1.13 billion while monthly active users grew 15 percent for a total of 1.71 billion.
Brands continue to gravitate toward Facebook for advertising as the platform becomes more appealing thanks to recent moves such as enabling advertisers to more accurately measure their campaigns? effect on in-store sales with a native store locator for mobile ads.
Facebook is also moving towards putting video at the heart of all its services, helping it attract brands and publishers.
Huffington Post and Daily Mail are some of the top publishers dominating the Facebook video scene in recent months thanks to unique content that leverages feel-good human-interest stories, top news and interesting science (see story).
Brands are embracing video on Facebook.
Hilton Hotels & Resorts was one of the first hospitality marketers to leverage 360-degree video in an ad unit that enables consumers to tilt or rotate their smartphones as they are immersed in a virtual visit to the chain's Barbados resort.
Facebook is also becoming an important news organization, thanks to the quick success of Facebook Live, its live-streaming service. This year, important news developments ? including several shootings ? were broadcast live on Facebook by users.
However, Facebook?s recent decision to prioritize posts from friends over media pages points to its uneven relationship with traditional news media.
Chatbots on the Messenger app have taken off quickly this year, number more than 11,000 and including numerous brands trying to engage with users where they are spending their time, answering questions and enabling them to make purchases.
?The scale we have achieved with our messaging services makes it clear that they are more than just a way to chat with friends,? Mr. Zuckerberg said.
?That?s why we are also making it easier for people to connect with groups and businesses as well,? he said. ?We are going to keep focusing on that over the next several years.
The Ferrara Candy Company?s Trolli brand is translating its brand quirkiness for a chatbot on Facebook Messenger that offers a range of activities in chat form, including giveaways and several surprises meant to appeal to young users (see story).
Going forward, Facebook is looking at boosting search, artificial intelligence, augmented reality and virtual reality to drive next-generation engagements.
"As of the second quarter, more than 1 million people a month are now using Oculus on mobile phones through our Gear VR partnership with Samsung,? Mr. Zuckerberg said. "More than 300 apps are already available at the Oculus store for Gear VR store.
"We?ve filled all of our preorders for Oculus Rift and we are seeing increasing demand from retail as stores plan for the holidays,? he said.