Mobile Ad business grows Facebook revs by 63% in Q4 2013
What: Facebook has reported a record set of quarterly results, with quarterly revenues up 63% from last year thanks to solid mobile ad business.
Why it matters: 53% of the social network's revenue came from mobile advertising in the last quarter of 2013, up 23% on the same period the year before.
Facebook reported record quarterly revenues in Q4 2013, with an increase of 63% vs Q4 2012. 53% of the social network's revenue came from mobile advertising. 945 million members used the social network via mobile between October and December 2013, an increase from 680 million in the year-ago quarter. Mobile active users were 556 million on average for December 2013, an increase of 49% year-over-year.
Daily active users also produced healthy results, showing that 556 million accessed the service daily on average in December, marking a 49% increase on the same period in 2012.
Revenue for the fourth quarter of 2013 totaled US $2.59 billion, an increase of 63%, compared with $1.59 billion in the fourth quarter of 2012.
Earnings per share were 31 cents. For all of 2013, Facebook had revenues of $7.87bn, an increase of 55% year-over-year. The company made a profit of $1.5bn for the year.
"Custom Audiences has been key. Partner categories, too – in Q4 we more than doubled the number of categories from 500 to 1000. Measurement, too - Offline Conversion Measurement capability, which has shown that the average return on ad spend for News Feed ads is 8x" said Facebook in a recent statement.
Revenue from advertising was $2.34 billion, a 76% increase from the same quarter last year. Mobile advertising revenue represented approximately 53% of advertising revenue for the fourth quarter of 2013, up from approximately 23% of advertising revenue in the fourth quarter of 2012.
Revenue for the full year 2013 was $7.87 billion, an increase of 55% year-over-year.
Income from operations for the full year 2013 was $2.80 billion.
Black Friday was Facebook's single-biggest mobile ad revenue day in the quarter
Shopping: A recent study by Millward Brown Digital showed that while shopping in-store, people who use Facebook do so at 4X the rate of any other app or search. And for those who used Facebook as a source before shopping, over half stated that it was an influential source of information while shopping in-store
- Daily active users (DAUs) were 757 million on average for December 2013, an increase of 22% year-over-year.
- Mobile DAUs were 556 million on average for December 2013, an increase of 49% year-over-year.
- Monthly active users (MAUs) were 1.23 billion as of December 31, 2013, an increase of 16% year-over-year.
- Mobile MAUs were 945 million as of December 31, 2013, an increase of 39% year-over-year.
According to Slate, "the biggest structural change in Facebook’s business was the shift to placing advertisements in your news feed rather than beside it, a strategy that Facebook trumpeted repeatedly on Wednesday’s earnings call. Given the space limits on mobile devices, the ability of news feed ads to look like friends’ posts, and the added intrusiveness, this change has contributed to three results:
Ad click-through rate (CTR) soared to 4.5 times what it was a year ago.
Advertiser cost per impression (CPM: cost per thousand impressions) is way up, almost triple what it was a year ago, while cost per actual click is up 29 percent.
Advertising revenue per user is up 25 percent, with most of that increase coming from the U.S. and Europe."