Mobile now accounts for just wanting 1/2 Facebook’s total ad revenue, but there are concerns over a decline in teenagers using the location and plans to restrict news feed ads.
Facebook’s admitted yesterday (30 October) that it was seeing a drop in kids logging in for the primary time. Its chief financial officer, David Ebersman, said that while youth engagement was “stable” overall, it has seen a decrease in daily users, specifically among younger teens.
Facebook also said it would limit the variety of ads that feature within the news feed. Facebook said in July that it was showing around one ad per 20 posts within the news feed and Ebersman said that while this ratio is now “modestly higher” than 5 per cent, this can not increase much sooner or later.
He added that the proportion of promotions is the “least important tool” in boosting revenues. Facebook will instead center around growing its user base and extending demand to reinforce revenues.
His comments, combined with the remarks about declining teen usage, ended in a drop in Facebook’s share price by 3 per cent. This despite a 60 per cent year-on-year jump within the social network’s revenues to $2.02bn within the third quarter and profit coming in at $425m, when compared with a lack of $59m last year.
Facebook says prices for its mobile ads remain “high” and users are clicking on its news feed ads more frequently. CEO Mark Zuckerberg said on a decision with analysts that the common daily Facebook user is “engaging” with multiple ad a week.
Advertising revenues hit $1.8bn, with mobile now representing 49 per cent of Facebook’s ad business, generating around $880m within the period. This is often up from $150m a year ago when Facebook was just starting to develop its mobile ad business.
Users also are increasing, with Facebook counting 1.19 billion monthly active users on the end of September and 728 million daily active users. On mobile it has 874 million monthly users, with 507 million logging in daily.
“For nearly ten years, Facebook was on a mission to attach the sector,” said Mark Zuckerberg, Facebook founder and CEO. “The strong results we achieved this quarter show that we’re prepared for the following phase of our company, as we work to bring the subsequent five billion people online and into the data economy.”