Facebook recently reported their Q4 earnings of $5.84
Billion in revenues – a nearly 52% jump from a year ago. Total earnings for
2015 were $17.93 Billion which was a 44% jump over the previous year. Of
Facebook’s Q4 earnings $5.64 Billion (or nearly 97%) came from advertising. Mobile Advertising accounted for $4.51
Billion (or 80%) of their revenues – not bad for a company that shortly
after their IPO many predicted would falter due to paltry mobile ad spending at
the time.
What makes this mobile number so interesting is that for the
first time, more than 90% of Facebook’s active
users were on mobile. The company even indicated that users now watch 100 million hours of video daily on Facebook and
they are now exploring a more dedicated platform for Facebook videos to be
loaded and accessed. Currently, most video are loaded into a news feed and unlike
places like YouTube, they are not easily accessed outside of the news stream…yet
that is.
Facebook has rightly taken a laser focus on mobile and now
even leads with mobile over desktop in their own operations. In
a recent Fortune article, CEO Mark Zuckerberg stated “I told all of our
product teams, when they come in for reviews: Come in with mobile. If you come
in and try to show me a desktop product, I’m going to kick you out. You have to
come in and show me a mobile product.”
Here are some of my key takeaways from Facebook’s earnings
and what this helps to tell us about the future of digital advertising:
- Facebook’s new “mobile first” mentality will likely be the leading trend for most innovative companies to adopt moving forward. The old days of start with desktop and compliment with mobile are over and the trend has now been flipped. Last year Google also indicated that search from Mobile has now exceeded desktop search so all of the indicators are there. If you still need more proof, just look around any crowded line or restaurant.
- Video sharing and now video advertising is the future of digital advertising. YouTube and Facebook alone have validated what we already know: that people want to watch before they read. For advertisers, we also know that videos, when done properly, have led to significantly higher conversion rates on websites, landing pages, emails, and press releases. Videos in social media ads have also been shown to increase shares by up to 1200% and are the most effective medium for marketing and remarketing online.
- Facebook’s greatest value comes from its unparalleled reach. With their advertising platform now supporting highly-focused demographic targeting, intelligent remarketing, and video advertising in the news stream, Facebook is everything that direct marketers dream of online.
- For those who predicted that Facebook has passed its apogee and is sure to start its decline, think again. Love it or hate it, Facebook is now putting direct digital adverting in the driver’s seat for many years to come and if their quick turn-around to mobile tells us anything it is that they know how to quickly innovate in the right direction.
