A Note on Facebook’s Mobile Advertisement Surge
Facebook has finally put an end to all the lingering accusations and doubts about it ability to transform its social networking business into a mob ad giant. 62% of the revenues are now coming from advertising on the cell phones, which now are expected to become larger than newspaper, magazines and radio of the USA in the next year.
Facebook also added about 40 million new users in the second quarter of 2014, and about 1/5 of the world’s population is now a member of facebook and logs into their account for at least once a month. Facebook’s profit for the second quarter was recorded at $791 Million, which was only $333 million in the last year’s second quarter. Due to this brilliant performance, the share price of facebook also doubled to $75 from their IPO price of $38.
It was just two years ago when Facebook decided to place ads on their mobile app as well, and that was the time around their IPO. Facebook is envisaged to capture about 18% of the US mobile ad market worth $17.7 Billion in this year, and the mobile market’s worth is 9% higher than it was two year ago. Google is still the no 1 commander of this market, but there are expectations of decline in its share from 49.8% to 39.8% in some time.
Facebook has performed meticulous work in the mobile industry. Facebook wants large brands to get enticed and spend more money on Facebook’s mobile app and site, and for that facebook has a plan of going into premium video advertising. Facebook also launched mobile advertising network in the April of this year through which it can sell ads that do appear on the mobile app of facebook, but company doesn’t own them.
Facebook has also invested large amount in market research to prove brands that how their platform is a very effective one for them. It has been able to convince many large companies to spend more budgets on facebook ads and that has helped in the revenue growth of Facebook.
McDonald has also recently used a video ad campaign on Facebook for attracting customers to their French fires with the help of football players and world cup scenes. Apart from advertising, investors are attentive towards the user growth of facebook which is on increasing trend. About 1.32 billion users logged in to their facebook account during this quarter, which shows a growth of 3.5% from last quarter three months ago. Daily logged in users are estimated at 829 million on average in the month of June, which were 802 million in the month of March, again showing an increase.
However, Facebook ran into little trouble after the news got spread regarding psychological survey conducted by researchers without the knowledge of users who were tested, and there is a chance that this act can bring down number of users and people can leave facebook. Facebook apologized for their act last month and gave their justifications.