In its fourth quarter, Facebook posted a better-than-expected 51.7% jump in revenues to $5.84bn, while ad revenues grew 57% to reach $5.65bn.
And it is mobile that is leading Facebook’s ad growth. Over the December quarter, mobile ad revenue was up 81% year on year to reach $4.5bn – representing 80% of total ad revenue.
To put this in perspective, just three years ago mobile represented 20% of Facebook’s total ad revenues.
And speaking on an analyst call yesterday (27 January), Sandberg said Facebook (with 1.44 billion active mobile users) and Instagram (which has 400 million active mobile users) are now “the two most important mobile advertising platforms in existence”.
“Heading into 2016, it is clear that consumers have now shifted to mobile and business must know they now need to catch up. Marketers are realising if they want to reach their customers where they are then mobile is essential,” she said.
She picked out Microsoft as an example of a brand that has adapted to mobile, adding: “Over Christmas, marketers turned to mobile more than ever before and to reach a large global audience for the launch of Halo 5, Microsoft Xbox used optimised for Facebook and Instagram as they understood that people watch video differently in mobile newsfeed than on TV.
“They created videos to capture audience attention in the first three seconds even without sound. This drove over 380 million impressions and 49 million video views in key markets and increased purchases by 10% in the US.”
Although it didn’t reveal a figure, Facebook said it had grown its 2.5 million active advertisers over the fourth quarter and that 98 of the top 100 global advertisers on Facebook now advertise on Instagram too.
How Facebook can convince brands to shift to mobile
Yet despite Facebook’s rapid growth in advertising, Sandberg admitted it must still “convince” advertisers to make the shift to mobile.
“Last quarter we announced we had over 2.5 million active advertisers and since then our growth has remained strong. However this represents a small fraction of the over 50 million small businesses now actively using pages so we see a big opportunity to continue to grow the number of Facebook advertisers going forward,” she explained.
“We’ve still got a lot of hard work to do. We really need to prove to clients, particularly as they scale and we become a bigger part of their ad spend, that we’re driving results.”
Sheryl Sandberg, chief operating officer at Facebook
“Ad platforms such as TV people have believed in for a very long time but we think our targeting can be better than any other platform. We also believe our ability to measure results can be deeper, but it’s up to us to prove that client-to-client.”
Sandberg said Facebook will continue to improve its advertising in 2016 by ramping up local awareness ads to help brick-and-mortar businesses reach people near their stores and by driving personalised marketing on an “even larger scale”.
Rise of the robots
Furthermore, Facebook founder Mark Zuckerberg said the social media giant had made “real progress” in creating the “new generation of computers that can see and understand”.
According to Zuckerberg, Facebook built a prototype AI system that combined language and vision comprehension over the fourth quarter.
You can show it an image that it’s never seen before and it can answer questions about that image,” he said during the media call. “And we’ve even used AI to help blind people experience their friends’ photos and news feed by describing the theme.
“Achieving the scientific breakthroughs to build AI that makes a dramatic visible difference in people’s lives is going to take a long time. But already we’re seeing opportunities to serve our community.”