Facebook had a strong third quarter as its total revenue grew 56 per cent and exceeded USD 7 billion for the first time. The social media giant delivered USD 2.4 billion in GAAP net income, up 166 per cent.
“We had another good quarter. We’re making progress putting video first across our apps and executing our 10 year technology roadmap,” said Mark Zuckerberg, Facebook founder and CEO.
In September 2016, 1.18 billion people used Facebook on an average day, up approximately 172 million or 17 per cent compared to last year. This daily number represents 66 per cent of the 1.79 billion people that used Facebook in the month of September. Mobile was the key growth driver, with 1.09 billion people accessing Facebook on mobile on an average day in September, up approximately 197 million or 22 per cent compared to last year.
Video, video and more video
Mr Zuckerberg emphasised the growing importance of video and said the company is looking to put video first across all its apps. Facebook had introduced the Live video feature in early April this year and the Q3 results show that the number of people going live at any given moment since May has grown by four times.
“People are creating and sharing more video, and we think it’s pretty clear that video is only going to become more important. So that’s why we’re prioritising putting video first across our family of apps and taking steps to make it even easier for people to express themselves in richer ways,” opined Mr Zuckerberg.
In August, Facebook also launched its Snapchat-style competition feature for Instagram called Stories which people can use to share moments throughout the day through photos and videos that disappear after 24 hours. By Q3 2016, Stories has more than 100 million daily actives while the Explore tab in Instagram which has been tweaked to include more videos and stories, has 100 million daily actives now.
Facebook is also looking to attract its rival Snapchat’s users with a new camera that will have more photo and video features. “In most social apps today, a text box is still the default way we share. Soon, we believe a camera will be the main way that we share. We’re already testing this in our main Facebook app with a version that has a camera, directly just one swipe away from News Feed, with creative effects for your photos and videos. And in Messenger, we’re testing new camera and video features. We’ll be experimenting with even more visual messaging tools over the next few months as well,” explains Mr Zuckerberg.
Ad business is up, thanks to mobile
The Q3 ad revenue for the social media company grew by 59 per cent and mobile ad revenue reached USD 5.7 billion, up 70 per cent year-over-year, and accounted for approximately 84 per cent of total ad revenue.
“Our growth was broad-based across all regions, marketer segments, and verticals. In Q3, we announced that we have over four million active advertisers on Facebook and over 500,000 active advertisers on Instagram. The number of advertisers on both platforms continues to grow quickly, and we’re pleased to see more and more of them using the full range of our ad products,” highlighted Sheryl Sandberg, Facebook COO.
Ms Sandberg outlined three priorities for the company ahead: capitalising on the shift to mobile; growing the number of marketers using Facebook’s ad products; and making Facebook ads ‘more relevant and effective’.
In September 2016 itself, over three million small businesses have posted a video on Facebook – including organic posts and ads. “People have shifted to mobile, and we remain focused on helping businesses catch up. We know that marketing shifts take time. The first TV ads showed people standing in front of microphones reading their radio ads. Similarly, many of the first mobile video ads were TV ads dropped into mobile. Ads optimised for each platform often perform better, so marketers are increasingly tailoring their creative for mobile,” said Ms Sandberg.
In terms of ad revenue growth rates Asia Pacific and North America led with 64 per cent and 62 per cent, respectively.
Desktop ad revenue grew 18 per cent. David Wehner, CFO explained, “This is higher than growth rates in recent quarters and was aided by our efforts to limit the impact of ad blockers on advertising served via web browsers.”