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Did Facebook Just Prove the Case for Mobile Ads?

Did Facebook Just Prove the Case for Mobile Ads?
By Jennifer LeClaire

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"You can argue that Facebook's mobile success is more broadly reflective of industry trends and marketer adoption of mobile advertising. But Facebook also has the ability to show more or fewer ads in the mobile newsfeed so it has control over mobile ad revenues in a way that few other publishers do," said analyst Greg Sterling.
 



Facebook is proving some of its skeptics wrong with its latest earnings report, but the numbers may also prove the points of marketing gurus who are heralding the value of mobile advertising. The social networking giant's second quarter results have the tech industry abuzz.

Revenue for the second quarter of 2013 totaled $1.81 billion, an increase of 53 percent, compared with $1.18 billion in the second quarter of 2012. Revenue from advertising was $1.60 billion, representing 88% of total revenue and a 61% increase from the same quarter last year. And mobile advertising revenue represented about 41% of that figure.

"We've made good progress growing our community, deepening engagement and delivering strong financial results, especially on mobile," said Mark Zuckerberg, Facebook founder and CEO. "The work we've done to make mobile the best Facebook experience is showing good results and provides us with a solid foundation for the future."

Is Facebook an Anomaly?

We turned to Greg Sterling, principal analyst at Sterling Market Intelligence, to get his take on how this translates to the broader mobile advertising equation. He told us this is partly specific to Facebook and it partly represents acceptance and adoption of mobile.

"Facebook is something of a unique case, not unlike Google," Sterling said. "Marketers' campaigns can appear both on the PC and in mobile without any modification -- so mobile advertising requires less work on Facebook."

What's more, he continued, consumer usage data reflect that Facebook is the dominant mobile app in terms of time spent. This provides additional credibility that mobile ad networks and exchanges don't have.

"You can argue that Facebook's mobile success is more broadly reflective of industry trends and marketer adoption of mobile advertising. However there are unique elements about Facebook that make it something of an outlier," Sterling noted. "Facebook also has the ability to show more or fewer ads in the mobile newsfeed so it has control over mobile ad revenues in a way that few other publishers do."

Facebook Poised for More Ad Growth

For its part, Facebook is rocking and rolling -- and is likely to attract even more advertisers in the quarters ahead. The social networking site posted 669 million daily active users, on average. That's a 27 percent year-over-year increase. Monthly active users rose to 1.15 billion, a 21 percent year-over-year increase. And mobile monthly active users were 819 million, a 51 percent year-over-year increase.

On the flip side, Facebook surpassed 1 million active advertisers on Facebook. The company credits significant growth in local business advertising for part of that number.

Facebook is positioning for future growth. During the quarter, Facebook launched products including Verified Pages, hashtags and embedded posts to help people on Facebook connect with their friends about what's taking place all over the world. And Instagram could be the next advertising bet as the company beefed up engagement by adding Video for Instagram, which saw 5 million videos uploaded in the first 24 hours.
 

Tell Us What You Think
Comment:

Name:

Ainsley:

Posted: 2013-07-26 @ 12:30pm PT
No... Facebook only proved that it has learned well from Airpush, Millennial Media, Tapjoy and a handful of other mobile ad networks that have been showing developers and advertisers for much longer than FB has how to innovate, target, and make the mobile ad experience profitable and effective for devs/advertisers and acceptable if not surprisingly beneficial to mobile users. I'm so tired of FB being propped up as a mobile advertising innovator! It's not!



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