In the third quarter, Facebook reported that that its profits doubled to $621 million, once expenses related to stock options were excluded. Revenue increased by 60 percent, to $2.02 billion, when compared with the third quarter of last year. About $1.8 billion of revenue came from advertising. The results for both revenue and profits were higher than Wall Street’s expectations.
According to a statement from Facebook, prices for mobile ads remained high and users were clicking on them in their news feeds more frequently. Today, nearly half of Facebook’s users connect to the social network with their mobile phones, which is where nearly half of its advertising revenue comes from. Mobile ads accounted for 49 percent of the company’s advertising revenue. This was up from 41 percent in the second quarter of this year.
Twitter takes a similar approach to mobile ads, so the news from Facebook bodes well for the company. Clark Fredricksen, a vice president with research firm eMarketer, says that Twitter would reap benefits from Facebook’s efforts in mobile. In recent months, the larger company has been investing heavily in educating marketers and users about mobile ads. He said, “Facebook has been a major force in helping advertisers and users get more comfortable with seeing and buying mobile ads.” Twitter recently has its initial public offering.
The results cemented the company’s position as the leading platform for mobile display ads. Facebook currently operates the largest online social network in the world. Facebook’s mobile ads contain pitches for everything from games to sugary snacks. However, other big Internet companies, including Yahoo and AOL, are seeing fewer benefits from mobile ads. Fredricksen believes that this is due to their ads being fragmented across various sites and being less appealing to advertisers. Because of its dominant position in search ads, Google is still the overall leader in mobile ad sales. eMarketer estimates that Google will account for roughly half of the world’s $118 billion in digital advertising this year.
