Facebook’s mobile ad revenue is growing at an astonishing rate and it’s showing no sign of let-up.
For a company that admitted in its 2012 IPO filing it did not “generate any meaningful revenue” from its mobile products, Facebook has truly pivoted.
We already know that in 2013 45% of Facebook’s $6.99 billion in full-year ad revenue was derived from mobile ads. But by 2016 Facebook’s worldwide mobile revenue will reach 75% of its total (or $7.39 billion), according to new estimates from research firm eMarketer.
That’s huge and, if eMarketer’s predictions are accurate, means Facebook is on track to post $18 billion in revenue in 2016, suggesting that Facebook will also be selling mobile ads at a premium compared to its current mobile ad rates. Mobile ads across the industry tend to be sold at a lower price compared to desktop for a variety of reasons, but it's mostly down to the received wisdom that people are less likely to buy products on their mobiles and that there’s simply less space to advertise in on mobile.
The reason why Facebook’s mobile offering is working so well? EMarketer principal analyst Debra Aho Williamson said in a press release accompanying the new forecast: “Because the Facebook experience is basically the same across devices, advertisers don’t have to reinvent the wheel to place mobile advertising. As Facebook’s user base shifts even more heavily toward mobile, it is well positioned to see increasing ad revenues from this channel.”
EMarketer predicts Facebook will be closing in on 1 billion mobile users by the year-end, but that by 2016 it will have clearly crossed that landmark. By 2018 EMarketer says Facebook will have 1.34 billion mobile users, meaning 75% of its userbase will use its mobile site and apps.
The overwhelming majority of those mobile users currently come from the US, which this year had 123.1 million users logging on to Facebook via their mobiles. But that is set to change in the coming years. By 2017 India will have overtaken the US to have the most Facebook mobile users — notching up from 80.6 million mobile users in 2014 to 167.7 million by 2017 (to the US’ 143.8 million mobile users that year.)
The chart to the right also shows how prominent markets like Indonesia, Brazil and Mexico are set to become as part of Facebook's mobile audience.
In 2014 Facebook made a series of acquisitions and strategic plays to grow its audience and commercial revenue in emerging markets. It launched its Internet.org initiative to connect “the next 5 billion” to the internet; it also acquired Bangalore-based startup Little Eye Labs, which builds mobile app analysis tools; and it owns Whatsapp, which had 70 million monthly active users in India as of November last year, according to Statista data.
Earlier this week Twitter announced it had acquired India-based mobile marketing startup Zipdial as it looks to bolster its position in emerging markets.
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