Fueled By Mobile And User Growth, Facebook’s Q3 Earnings Beat Expectations

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Facebook continues to see hand-over-fist growth in its ad revenue and user base, according to Wednesday’s third-quarter earnings report, which pegged overall advertising revenue at $4.3 billion. That’s a 45% gain over Q3 2014, and 57% higher when currency fluctuations are factored in.

Facebook’s user growth continues to accelerate. Since the platform’s first-ever billion-user day in late August, “at least a billion users per day” has become par for the course just a couple of months later, according to CEO Mark Zuckerberg.

North America may represent its biggest growth contributor, but Zuckerberg indicated the company is looking well beyond the region. “We want to serve the global community, not everyone on Facebook today.”

Facebook Lite, a product for low-bandwidth user connections, “is one of our fastest-growing interfaces,” Zuckerberg said, pointing to the 50 million people who now regularly use the app.

Of Facebook’s three main priorities, “capitalizing on the shift to mobile” is the first, according to COO Sheryl Sandberg. That includes increasing the number of marketers on the platform and providing more relevant, effective ads.

The company’s efforts in mobile appear to be paying off. Facebook and Instagram account for one out of every five minutes spent on mobile in the US, according to Facebook execs. Mobile now represents 78% of all Facebook ad revenue at $3.4 billion, a 2% rise since last quarter.

Facebook is also branching out in digital video as well, which is an area of great opportunity. Facebook videos receive more than 8 billion views per day, with a daily audience of more than 500 million users.

“Over the next few years, video is going to be some of the most engaging content online,” Zuckerberg said.

Video content will more thoroughly suffuse the basic user experience on Facebook, he said, ranging from video options in user profile design to SMBs posting non-advertising content on their pages.

Sandberg identified video as a key tool for Facebook to secure larger, more comprehensive campaign dollars. She cited recent research to claim Facebook ads boost recall and brand linkage. And recent Facebook metric changes have shown that the social media giant sees itself as the digital home for TV dollars – as does YouTube.

But while YouTube emphasizes its longer duration of the average viewing session, Zuckerberg sees media conforming to fit Facebook’s digestible feed, using the example of late-show programs, such as “The Tonight Show with Jimmy Fallon,” which now produce segments built for social media.

Investments in ad tech products are also paying dividends. Sandberg touted LiveRail’s age and gender targeting, which deliver more than 90% accuracy, compared to accuracy ranging from 31% to 56% without it. Facebook’s average price per ad is more than 60% higher now compared to a year ago.

 

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