Facebook’s prospects as part social network part advertising platform were given another hefty boost last night (July 29) as the company declared revenue of £2.6 billion for Q2, almost all of it deriving from ad sales.
Mobile accounted for more than three quarters of the overall taking, but to drill down further, experts believe it is the rising contribution of video which enabled earnings at the group to grow 39% year on year.
Stephanie Carr, VP of EMEA at ad tech group Marin Software, says that while advertisers are definitely spending more than ever on reaching Facebook’s smartphone and tablet users, its progress in creating a highly appealing video ad service is also worthy of coverage.
“Hot on the heels of mobile, video is starting to have a major impact on Facebook’s road to domination,” she comments.
“Four billion videos are watched over Facebook’s network. The social giant’s approach to this channel is impressive because it’s more than just a numbers game. Ads are served via an auto-play format on a hyper-targeted basis, using detailed audience data, requiring no activation from the consumer.”
“It’s clear Facebook is building a powerful video philosophy which will offer smart advertisers the opportunity to push video content in increasingly innovative ways.
“Video is the channel to watch over the final half of 2015,” Carr states.
Are you watching?
In a call to investors in light of the Q2 results being shared, Facebook CEO Mark Zuckerburg echoed the thoughts of analysts by insisting that connecting people with video content would be crucial to Facebook moving forward.
On the advertising front, it’s said that Facebook is trialling things like retargeting served to people who watch specific clips, forging a seamless tie between display and video.
But as Carr states, it’s hard to ignore the presence of mobile and its 62% growth in sales year on year when considering the direction Facebook is looking to head.
“The surge in mobile usage has fuelled advertisers to allocate more spend in this direction,” she comments. “It’s been widely predicted that 75% of Facebook’s ad revenue will come from mobile by the end of the year. Today’s percentage of 76% confirms this.”
Staking a claim
Also commenting on Facebook’s Q2 results and capabilities in video, Craig Palli, chief strategy officer at mobile marketing group Fiksu, said the network’s new high-performance mobile video inventory was aiding its status as a leader in the channel.
However, Palli is of the impression that other companies will be taking note of the advertiser hype around certain types of content.
“That position [in video and mobile] is not going unchallenged,” he states.
“Google, for example, is rapidly building out audience targeting options and has a ‘little’ video network of its own. YouTube – that is massively successful for advertisers and very effective on mobile.”
Perhaps a casualty of a greater emphasis on mobile options, Facebook’s desktop ad revenue dropped 10% year on year in Q2 following a 4% decline in Q1.
The site may have started off on desktop but seems clear on where it feels its future lies.