Blowing past analyst estimates, Facebook observed record gains in the last quarter of 2016 with revenue reaching $8.81 billion, up from $5.84 billion in Q4 the year before. The number exceeded the $8.51 billion predicted by Yahoo Finance.
The lion’s share of the total (84%) was made up by mobile ad revenue, flat from Q3 and rising from 80% in the same period in 2015.
The social network’s strong results come hot on the heels of the November’s announcement when Facebook decided to cut down on ad load to improve user experience, which was expected to “meaningfully” slow down the company's revenue.
It is the user-first approach that made Facebook the social media giant it is today, however, Teads’ UK MD Justin Taylor believes the company needs to be wary.
“If Facebook is not careful, the search for more ad revenue could put that user experience at risk,” he commented.
Despite the change in its advertising approach, Facebook is going strong. Its total monthly user growth increased by 17% year-over-year last quarter, reaching 1.86 billion; its apps Messenger and Whatsapp boast over one billion monthly active users each, and Instagram follows closely with over 600 million.
The volume of users has attracted over four million active monthly advertisers, an increase from 2.5 million in the last quarter of 2015. RBC & Ad Age reported that towards the end of last year, over half (60%) of marketers on Facebook found their ROI to improve over the past six months, compared to 42% on Google and 25% on Twitter.
Taylor believes the challenge the platform is facing this year is balancing the interests of all involved - users, advertisers and content creators - which might mean considering user-friendly ad formats that seamlessly fit in alongside content.
“This way Facebook can ensure content makers are making a fair income from the value they bring users without driving people away with a barrage of disruptive and annoying adverts,” he added.
EMarketers is expecting the social media giant’s global revenue to reach $33.76 billion this year, of which $29.71 billion would come from mobile ad revenue - up about 35.2% from 2016.