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Mobile Advertising Boosts Facebook’s Revenue

Facebook’s third-quarter earnings, which were released last Wednesday, show a marked increase in advertising revenue, especially on mobile devices.

Despite concerns over Facebook’s advertising model, their third-quarter earnings have increased 36% from last year to $1.08 billion, $139 million of which was raised by mobile advertising.

“Our opportunity on mobile is the most misunderstood aspect of Facebook today,” creator and CEO Mark Zuckerberg said, “most people underestimate how fundamentally good the trend toward mobile can be for Facebook.”

The first mobile Facebook adverts were made available six months ago, and in June advertisers on Facebook were able to buy specific adverts.

There are currently four variants of advertising on Facebook mobile:
  • Sponsored Stories, which recommend brand pages based on a friend’s activity
  • Promoted Posts, which highlight pages that friends have liked in the News Feed
  • Mobile Ads For Apps, which promote applications
  • Offers, which display promotions in the News Feed.
Companies can also decide where their adverts are displayed on Facebook: over all of Facebook, just in the News Feeds on desktop devices, just on desktop devices, on both mobile and desktop News Feeds or just in the News Feeds on mobile devices.

In a recent study, Nanigans, a company which buys advertising space on Facebook, worked out that Sponsored Stories on mobile are 45% cheaper than on desktop. Lower prices means a higher ROI, which is somewhat thanks to the novelty of mobile advertising.

Other studies have already shown that mobile advertising is the most efficient variant of social media marketing, with Facebook mobile adverts displaying the highest CTR of 1.037%, and the second highest CVR of 65.76%.

With 604 million of the billion or so Facebook users already mobile, Facebook, and other internet giants such as Google, are looking to take advantage of a lucrative and growing market. Many believe that Google will soon be making $8 billion per year in mobile revenue.

So why is mobile advertising so effective? Mobile advertising has quickly improved so that now there is little difference in quality between a mobile advert and a desktop advert.

A positive difference for advertisers is the amount of space mobile adverts take up on the smaller screens, making them more visible and increasing the CTR.

Currently, mobile Facebook users have a limited exposure to adverts, whereas on desktop the amount of advertising is steadily increasing. However, advertisers are expected to spend $6.4 billion on mobile advertising this year, an increase of 62%.

As well as an increase in advertising, an expected increase in the number of mobile devices capable of accessing Facebook ensures mobile advertising will be a success.

What do you think of mobile advertising?

Contact us on Twitter or leave your comments below.

Will Sigsworth

Follow us @SocialMediaF & @WillAtSMF

Mobile Advertising Boosts Facebook’s Revenue Reviewed by Unknown on Wednesday, October 31, 2012 Rating: 5
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