Facebook's Q4: Mobile Ad Revenues Surpass Desktop

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facebook-mobile-firstIn Q4 2013, Facebook for the first time derived more than half of its ad revenue from impressions served to mobile devices.

Mobile ad revenues were $1.2 billion, 53 percent of the overall $2.3 billion in ad revenue it garnered for the period, the company reported Wednesday.

It's a significant milestone for the company, which has long touted its "mobile-first" credentials but has yet to prove out that boast in its financial results. And it puts the company in a much more comfortable position than media sellers such as Yahoo, which despite major mobile investments reported earlier this week that mobile ad revenue is "still not material" to the business.

Overall fourth quarter revenue from Facebook advertising (desktop and PC) was $2.34 billion, a 76% increase from the same quarter last year.

In its earnings release, Facebook noted:

  • Daily active users (DAUs) were 757 million on average in December 2013, a lift of 22% year-over-year.
  • Mobile DAUs were 556 million on average during the same month, a YoY increase of 49%.
  • Monthly active users (MAUs) were 1.2 billion as of December 31, 2013, a 16% YoY increase.
  • Mobile MAUs were 945 million as of December 31, 2013, a 39% YoY increase.

Facebook has a number of advertising tests underway, including newsfeed video ads and a mobile ad network. But executives offered few details on these initiatives during the company's earnings call, other than to say mobile newsfeed ads are performing well.

Rather, CEO Mark Zuckerberg and COO Sheryl Sandberg kept things at a high level – focusing on user experience and ads quality.

"We have an opportunity to make advertising content as good, relevant and timely as the content your friends are sharing with you," Zuckerberg said. "At first that may seem kind of crazy. But the folks who are advertising … put a lot into improving the quality of their ads."

To take one example, Zuckerberg believes video will be additive to the user experience -- but don't hold your breath. "A lot of this is going to be incremental as we make improvements [and] more advertisers come into the system. There's a long way to go before we get to the quality level we want, but I think over a multiyear period we can get there or very close."

Facebook chose not to field a question on engagement trends with its teen audience, something it issued a brief warning on last quarter.

"We have no new data to report on teens," said CFO David Ebersman. "We're focused on creating great products that all of our users including teens will stay engaged with."

On the product front, Zuckerberg said the coming years will bring more apps serving a wider range of sharing needs. He said the company will look to offer more experiences like the Messenger app and Instagram, offering social experiences outside the core Facebook product. "We want to … build a handful of great experiences that are separate from what you think of as Facebook today."

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