Mobile advertising injects life (and revenue) into the social media giant.
The fourth quarter results for Facebook suggest that, despite signs that teens are abandoning ship in favour of picture-based platforms like Instagram and Snapchat, the biggest social network is still performing well. In fact, revenue grew by 49%. According to founder and CEO Mark Zuckerberg, “[t]his has been a good quarter for Facebook and a great end to the year.”
Considering the fact that Facebook now boasts 1.39 billion monthly active users, while 890 million Facebook users log in on a daily basis, he’s not wrong. The increase of 133 million DAU in 2014 could be interpreted as a success unto itself, so the increase in time spent per person, per day across Facebook services of 10% is the icing on the Facebook cake. And that’s not taking into account the results from Whatsapp, which Facebook acquired last last year.
Financially speaking, Facebook saw revenue rise 58% on the previous year, making $12.47bn. Of it’s advertising revenue for the fourth quarter, mobile ads accounted for 69% – a total of $2.48bn.
What can we learn from the announcement?
Despite fears Facebook is about to become the next MySpace and peak, active user growth (slower than previous years) is growth nonetheless. The policy to acquire growing services like Whatsapp, Instagram and Oculus Rift demonstrate the company’s intention to expand beyond social media into more tech-based avenues – akin to Google.
We’ve already seen the rise of Facebook’s native video services but this in-house video might be part of why the mobile ad side of Facebook is driving the business. As Twitter launches its own in-app video features and Snapchat gives brands a space to advertise in ‘Discover’ we’re seeing the importance of video content to marketers.
The reduced effectiveness of organic posts on Facebook is no secret, but the pay-to-play environment is not necessarily the best solution. As always, content is king and sponsored posts that add little or no value to the user will always perform worse than those that do.
The solution? Perhaps Snapchat are onto something with ‘Discover‘: highly editorial content that focuses on storytelling over media metrics. The audience that Facebook is losing to the likes of Instagram appear to prefer sponsored content that feels authentic rather than pushed on them. So does the majority of Pinterest’s audience.
For the time being, Facebook is still the one to beat. But for how long?
Over To You
What do you think? Is Facebook still part of your marketing strategy?