FACEBOOK keeps getting richer with the latest earnings showing mobile ads and video marketing are driving the growth.
New advertising products are dragging more marketers into the Facebook tent, forcing up ad prices and increasing revenues, while the bean counters actively reduce opportunities for business pages to reach their audience without paying for it. This is despite repeated warnings that the number of worldwide users is reaching saturation point.
At the release of first quarter 2015 results last week, Facebook revealed revenue rose to $US3.54 billion, compared with $2.5 billion in the first quarter of 2014.
For the same period, Facebook’s Monthly Active Users increased almost 3.5% to more than 1.4 billion – up 24% on the same time last year – with most of the surge coming from the Asia Pacific. Daily Active Users grew even more – up 31% to 936 million.
Facebook flagged the following areas for future growth:
- Video marketing
- Remarketing across multiple platforms – specifically Instagram, Facebook and Whatsapp
- Converting business page owners into advertisers
- Enhancing advertising products and audience targeting offerings
- Improving ad performance measurement
- Monetising the three key mobile apps as the user base continues to grow
TV Advertising on Notice
And the social network has the global $US200 billion network TV advertising market in its sights as it targets hundreds of millions of users who have Facebook switched on during prime TV time slots.
The social network’s director of research Arvind Bhatia said: “Facebook has continued to roll out auto-play video ads with additional advertisers, and we expect a gradual expansion throughout this year. Ultimately, video ads will help Facebook more directly go after the $200 billion-plus worldwide TV advertising market. We note that in the U.S. alone, roughly 90 million to 100 million people are using Facebook during primetime TV hours.”
Stats released as part of the earnings statement showed Facebook and Instagram now account for a staggering one in every five minutes spent on mobile in the US. The big data keeps coming with App Annie reporting that Facebook, Facebook Messenger , WhatsApp and Instagram – all owned by Facebook – are now the four most downloaded non-game apps on the planet.
More than 800 million people now use Whatsapp every month, while 600 million regularly use Messenger and 300 million have dropped anchor on Instagram.
Striking while the iron was hot, Facebook pre-empted the earnings announcement with news of an algorithm update that prioritises posts from friends while warning that reach could decline further for business pages.
Facebook’s News Blog said the impact of this change would vary:
“In some cases, post reach and referral traffic could potentially decline. Overall, pages should continue to post things that people find meaningful and consider these best practices for driving referral traffic,” it said.
A leading SEO influencer, Moz founder Rand Fishkin, took to Twitter and Facebook last week warning businesses about the significance of the change.
— Rand Fishkin (@randfish) April 22, 2015
“Google’s “mobile update” may, in hindsight, seem small compared to the change Facebook announced today,” Fishkin said. “Publishers are going to be in a tougher and tougher position, given that Facebook’s organic reach is already so low (~2% on avg was the last reliable number I heard).”