Facebook announced their latest earnings on Wednesday, posting $2.59 billion in revenue and beating analyst estimates. The market has responded in kind – Facebook’s market value went up by more than $20 billion in a single night, and the stock is currently trading at near-record highs. Apart from the effects on Wall Street, the latest from Facebook presents a series of clear signals for marketers about one of the largest media companies in the world.
What can the latest earnings announcement teach us about Facebook?
Facebook is officially a mobile company
In 2013, Mark Zuckerberg announced that “Facebook is a mobile company” and the latest news makes it official. For the first time, mobile ad revenue was greater than desktop ad revenue, now accounting for 53% of all ad revenue, or $1.25 billion. The company posted its first billion-dollar mobile revenue quarter, more than all revenues combined the previous year. Mobile ads generated $8 million on Black Friday alone.
Mobile usage is also the key driver of gains for Facebook. Mobile monthly active users have more than doubled in the last two years, growing to 945 million. More notably, mobile-only users now account for a massive portion of Facebook’s user base, with nearly 300 million people accessing the site exclusively through mobile. As marketers think about their future on social, mobile teams can’t be divorced from the planning process.
Social provides global scale
One of the most important trends to note in Facebook’s growth is its international focus. Facebook gained 2 million users in North America in Q4 and another 6 million in Europe – but grew by 17 million in Asia and by another 14 million across the rest of the world.
The potential for global scale is massive, and even with 1.2 billion people on the platform, the company is still very early in its plans for international expansion, with Mark Zuckerberg admitting “We’re still a small part of the world’s population.”
As the largest social network, we can look to Facebook as a leading indicator of broader trends for all social platforms. International expansion will be a key focus for almost all social platforms, and marketers need to plan for how their brand is managed, portrayed, and controlled on a global scale.
Facebook side-rail ads are going away. Facebook tabs are gone.
Facebook side-rail ads and tab experiences have been declining for some time, but the latest revenue figures signal their status as a marginalized tactic.
News Feed ad revenue drove Facebook’s gains, up more than 65% in all of the regions of the world Facebook tracks. They also outperform other advertisements and continue to drive up the price per ad. Facebook’s ad prices increased by 92 percent in 2013, citing that the positioning and quality of their advertisements – ie. in-feed – matters far more than the volume.
Mobile has no place for side-rail ads and doesn’t easily host tab experiences. If Facebook is seeing more revenue, better rates, and better consumer response from News Feed ads, we can reasonably expect them to downplay display ads and tabs in the near future, or completely eliminate them as with the Sponsored Stories product. Once a go-to tactic, Facebook tabs are experiencing the same siloed treatment that brand microsites did in the early 2000s, and should be off the table for any forward-facing marketer.
Content is the atomic unit of Facebook marketing
If we take the above three trends – mobile, global, and a focus on the News Feed – then the future of Facebook revolves around content. The leadership of Facebook echoed this sentiment from all sides, with an emphasis on quality over quantity.
“We have this long-term goal of making the advertising quality content as good and as relevant and timely as the content that your friends are sharing with you,” Mark Zuckerberg stated on the call. “Our plan is to continue focusing on improving quality, since we think this is the best way for us to improve the experience for people on Facebook, returns for advertisers, and our own revenue.”
For marketers, creating great content has to be the biggest focus when planning for social. This is the biggest win for all parties. Advertisers see better reactions from potential consumers, Facebook sees greater revenue, and Facebook users have a better experience on Facebook with less interruption from brands.