Facebook continues with its growth in mobile ad revenue, reports total revenues of USD 2.02 Bn for Q32013

facebookFacebook Q3FY13 results are out, again giving its investors a reason to smile and celebrate. Continuing with the past quarter revenue increments, Mark Zuckerberg’s venture, not only surpassed the Wall Street predictions this time, but also beat its own total of 3 months and nine months ended September 30, over year 2012.

The company posted an EPS of 25 cents on USD 2.02 Bn in revenue, as compared to Wall Street predictions of 19 cents on USD 1.91 Bn in revenue. The stock was up by 8 percent in after-hours trading.

The advertising revenues totaled to USD 1.80 Bn, representing 89% of the total revenue and a 66% increase from the same quarter last year. The mobile advertising revenues represented approximately 49% of advertising revenue, i.e. USD 882 Mn.

Net income for the quarter was USD 425 Mn, daily active users increased 25% Y-o-Y to 728 Mn, and monthly active users rose to 1.19 Bn, an Y-o-Y increase of 18%.

As per the release, the Q3FY13 revenues saw an Y-o-Y increase of 60%, compared with USD 1.26 Bn in the similar quarter last year. Also, there has been an approx. 11.60% growth, compared to USD 1.81 Bn in revenue in Q2, 2013.

Since, the time Facebook started building its mobile traffic and advertising strategy, the critics were having long doubts about its success in the field. Recently, Forrester also released a report stating that Facebook is the least satisfactory in terms of online marketing satisfaction for brands.

However, the current quarter results are telling an entirely different story. The mobile advertising results are continuously on a higher growth side since past two quarters, viz. 41% of USD 1.59 Bn ad revenue in Q2FY13 and 30% of USD 1.25 Bn ad revenue in Q1FY13.

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Though the investment of marketers in Facebook is constantly increasing, the recently released Forrester report highlights that audience engagement and satisfaction for marketers is the least for Facebook. As we believe, the marketers might be facing ‘Fear of missing out’ syndrome and despite of having less satisfaction, they are not avoiding investing in Facebook, given its huge reach.

According to other publications, this year Facebook will account for a 5.41% share of all global digital ad revenues and a 15.8% share of all global mobile ad spending. This is, however much less as compared to Google’s share of 32.48% and 53.17% respectively.

The investors are also looking forward for the two new products from Facebook- Instagram and Video ads-to be launched in next few weeks.

Currently, with an overall look on the revenues, achieving the expected USD 2 Bn mobile ad revenues till the end of this year may seem quite far fetched. But looking at the increasing number of its mobile daily active (507 Mn, an Y-o-Y increase of 54%)  and monthly active (874 Mn, an Y-o-Y increase of 45%) users, the investors can still hope for improved results for the next quarter.

Also, with digital ad spending rising by 13.3% to USD 10.46 Bn last quarter in US alone, there is plenty of scope for Facebook’s growth. But how Mark Zuckerberg will be cashing in on the opportunity, is yet to be seen.

Click here to read the complete release.

To contact the author, email at meha@wirefootiondia.com