Facebook Rakes in Record-High Quarterly Revenue at $9.32 Billion
As the biggest social media channel to date, Facebook has beaten its personal best yet again, with the latest stats showing the global giant has churned out a huge $9.32 billion revenue for the second quarter of 2017.
Yes, that’s right – that trusty social media channel we’ve come to love and adore has recently delivered a much higher-than-expected quarterly profit: a whopping $3.89 billion, to be exact. The sales growth represents a 71% increase from $2.28 billion in the same period a year earlier whilst beating the average year-on-year growth predicted by financial analysts.
The soaring numbers underscore the power of Facebook and its ironclad grip over society, but what’s perhaps most notable about this rapid incline is the contribution mobile video ad sales have played.
Mobile ad revenue is responsible for about 87% of total ad sales in the latest quarter
The figures, released just last week to the public, indicate that much of this revenue boom is thanks to the rise of mobile video advertising on Facebook (and Facebook-owned Instagram). It started off with the introduction of automatic-play videos in 2014, which essentially bore two prolific results: users began discovering significantly more content via this feature, and businesses started seeing a decrease in cost-per-view for video ads.
Over three short years, video advertising has progressed enormously. The latest innovation? Facebook has now started inserting ad breaks into videos displayed within its news feed, teasing viewers just enough to sit through a brief 20-second ad before their video continues. Herein, video creators receive a 55% ad revenue share while Facebook keeps the remaining 45% – a strategy designed to lure more producers to the platform.
Given that the channel harnesses a community of more than 2 billion people, perhaps it’s unsurprising that Facebook’s advertising revenue has managed to reach such impressive new heights. Naturally, the continually-rising figures are working to encourage more and more people to shun old media formats and shift their attention towards this marketing gem.
Facebook is now the largest ad seller after Google
Combine every newspaper, magazine and radio network in the world, and Google and Facebook still manage to beat them in terms of advertising revenue. This year alone, Google will make a staggering $80.8 billion from ads while Facebook is set to bring in $36.29 billion. The contrast in ad revenue generated by digital channels compared to traditional platforms is certainly a sign of the times, but it also begs the question – where will Facebook find the room to host this growing number of ads?
Avoiding a news feed crammed with ads
Up until now, Facebook’s infamous news feed has typically been the place to advertise, with the company’s chief financial officer even stating that this area is “the biggest driver of growth”. However, it’s starting to reach a saturation point, and as a result, the social media giant is now looking for other streams to insert ads.
In addition to the recent launch of mid-roll video advertising, Facebook has also started inserting ads into Messenger and Marketplace – a separate buy-and-sell section that the company cleverly launched last year.
Reports also say Facebook will look at implementing original television-style programming within its mobile app in a bid to encourage users to spend more time on the platform. After all, the longer an audience hovers, the more opportunity to screen advertisements.
Let’s take a glimpse into Facebook’s product road map…
Video remains a major pinnacle of Facebook’s success, with ephemeral video-sharing features (similar to Snapchat) materialising across nearly all its apps. Herein, augmented reality continues to evolve, with filters, lenses and special effects becoming a prominent and ever-popular consumer tool for the platform.
In terms of future growth, there are rumours that Facebook’s next step will be towards virtual reality – particularly since the company acquired Oculus VR back in 2014. If this is the case, the opportunities for creative marketing ploys are boundless.
What does this mean for businesses?
There are three key takeaways that businesses should take from these latest stats. First and foremost, if you haven’t already established a Facebook presence, you better get onto it. Evidently, advertising on this platform has the potential for a major ROI in business – which leads me to my second point: if you’re going to capitalise upon the marketing benefits of Facebook, be savvy about it. As the latest stats indicate, video ads are a major drawcard, proving to be a predominant way to rake in revenue. Thirdly, mobile-friendly ads are a MUST. This should hardly be fresh news – the need for smartphone-suitable advertisements is a bit of a no-brainer in today’s handheld-wielding society. As Rebecca Lieb of Atimeter Group once wrote: “Mobile today equals mass media, a trend that offers brand marketers unprecedented opportunities to connect with people in incredibly personal ways on devices that are by their sides nearly 24/7.”
By combining these three forces, you have incredible potential to widen your sales funnel, lasso your audience and make your business boom.