Facebook: ‘Marketers are realising the creative opportunity we offer’

Facebook has credited the 67 per cent year on year increase in ad revenue in its second quarter to marketers beginning to treat the platform in the same creative way they do with TV.

Facebook ad revenue by user geography
Facebook ad revenue by user geography.

Speaking on the company’s second quarter earnings call, chief operating officer Sheryl Sandberg said over the last year marketers are beginning to understand “how strong the creative opportunity is”.

She added: “For a long time people have thought TV was for creative storytelling and online ads work for more targeted text-based results. And I think we’re seeing that change, which means the way people approach TV, they will also approach Facebook and are starting to, which makes those budgets work much better together.”

Sandberg cited a campaign from US insurer Progressive and activity around the World Cup from brands including Visa, Nike, Ford and McDonald’s as recent examples of marketers seizing the creative opportunity Facebook offers.

One of the other advantages of Facebook over other online services is that it offers marketers data to measure how users go from viewing ads online to other behaviours offline.

Sandberg said: “We think we have a real advantage here, that we have real identity. We have real identity across the desktop and across mobile. And we have found ways, in very privacy protective ways, to work with third party users of data to connect offline sales to online ads and those investments remain a very big focus for us.”

Facebook posted ad revenue of $2.76n in the three months to 30 June, while total revenue – which includes income from payments and other services – grew 61 per cent $2.91bn. Net income grew 127 per cent to $791m.

Mobile ads now account for 62 per cent of ad revenue, up from 41 per cent in the same quarter the previous year.

The number of users visiting the site monthly grew 14 per cent year on year to 1.32 billion, while 829 million return to Facebook daily, an increase of 19 per cent on the same quarter in 2013.

Facebook also used its earnings call to provide updates on some of its newer products.

The platform recently rolled out a trial of a “buy” button in the US, which led many commentators to suggest Facebook was looking to become an commerce player.

Sandberg said: “I think commerce is really important and is a growing important part of our business, as all marketer segments are growing. But I don’t think people should confuse that with Facebook selling things directly. The more people buy online, the more people buy things they discover through their mobile phones, the more people discover things from a News Feed and go on to purchase, the more important we are in driving e-commerce and I think we are increasingly important. That doesn’t mean we’re going to or have to sell products.”

However, Facebook CEO Mark Zuckerberg added that “over time” there may be an overlap between its Messenger service and payments. The company recently hired former PayPal president David Marcus to help with these efforts.

Zuckerberg also touched upon Facebook’s “multiyear voyage” in improving its search product. The company is in the process of indexing all the content on Facebook, having started with people and is now moving to connections. It will later look at other content “unique to Facebook”.

Facebook did not offer more detailed information on how it plans to grow other recently launched or acquired products such as Whatsapp as the deal has yet to close, Oculus Rift and Premium Video in the short-term. Instead, Zuckerberg talked more thematically about how these fit into the company’s wider three goals: connecting everyone, understanding the world and building the knowledge economy.

Zuckerber said: “There’s just a lot of things that we’re super excited about and obviously will talk about them publicly because we’re working with partners and we’re excited to talk about them here as well because we do really think that these are going to be great things to help build businesses overtime. But we want to make sure that we don’t get ahead of ourselves because these things are early and quality is the most important thing for growing this the right way over time.”

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