Facebook reports ad viewership decline offset by increase in ad price
WASHINGTON – Facebook reported its first-quarter earnings this week, and although the financials disappointed some watchers, the social media company revealed its ubiquity as a mobile application.
Facebook reported 1.44 billion active monthly users and 936 million active daily users globally; of those monthly active users, 1.25 billion, or 87%, use Facebook on their mobile devices. The company reported $3.54 billion in revenue, which is slightly less than the expected mark of $3.56 billion. With the announcement, share prices feel about 2%.
Facebook’s revenue stream is in line with the emphasis on mobile users. The site’s ad revenue came primarily from mobile accounting for 73% of revenue, up from 69% at the end of 2014.
Mark Mahaney, an Internet analyst with RBC Capital told The New York Times, “More than any other company right now, they are the single biggest beneficiary of this shift to video and mobile. This growth is going to be more sustainable than people realize.”
Facebook’s $19 billion acquisition of WhatsApp, an Internet messaging service, has helped the company grow its mobile presence. WhatsApp now has 800 million users having added 100 million since January alone.
Despite the steady growth in users and the shift to mobile devices, ad views dropped 62% this quarter. Facebook has compensated for declining ad viewership by raising the cost of its ads by 285%. This move allowed ad revenue to rise 46% this quarter despite the decline in ad views.
“We’re really pleased with the growth, which is across all of our verticals,” Facebook COO Sheryl Sandberg told the press.
Facebook and other popular sites shifting toward mobile devices is helping to drive the insatiable appetite for global date use. A 2014 report from networking giant Cisco showed the average U.S. consumer is using 1.38 gigabytes of data per month up from 752 megabytes per month in 2012.
The massive appetite for data has led Google to launch its Project Fi mobile virtual network operator service, which will allow customers from various U.S. cell companies that have partnered with Google to connect to free Wi-Fi hot spots nationwide, helping to ease the strain on cellular networks that are becoming increasingly congested with data demands. The Project Fi service is currently only available to Nexus 6 owners and is still in a limited test phase.
