Demonstrating its strong leadership and willingness to adapt, mobile advertising revenue has come to represent about 76% of Facebook’s total ad revenue. From the second quarter of 2014 through the second quarter of 2015, that represented an increase of approximately 62%, the social giant said on Wednesday.
“Mobile is the engine of our ad revenue growth,” Dave Wehner, Facebook’s CFO, told investors on a Wednesday earnings call.
“We’re capitalizing on the shift to mobile,” Sheryl Sandberg, COO at Facebook, said on Wednesday.
Overall, revenue from advertising was $3.83 billion -- a 43% increase from last year. Excluding the impact of year-over-year changes in foreign exchange rates, overall ad revenue would have increased by 55%, during the quarter.
Mobile ad revenue grew to $2.9 billion, or 76% of all ad revenue.
In addition, total revenue would have increased by 50%, Facebook said on Wednesday.
Overall, “this was a good quarter for us,” Mark Zuckerberg, Facebook founder and CEO, said on Wednesday.
Year-over-year, daily active users (DAUs) increased 17% to a daily average of 968 million, in June. During the same period, mobile DAUs increased 29% to a daily average of 844 million, in June.
Monthly active users (MAUs) were 1.49 billion as of June 30, which represented an increase of 13% year-over-year, while mobile MAUs were 1.31 billion as of June 30 -- an increase of 23% year-over-year.
This user growth stands in stark contrast to Twitter -- and some other aging social networks -- which have had trouble scaling their user base. Worldwide, Facebook’s audience now approaches 1.5 billion users, while the social giant now boasts 1.3 billion mobile users, Zuckerberg said on Wednesday.
Among other challenges facing Facebook, the company said that total costs rose 82%, year-over-year.
Looking ahead, Wehner warned that maintaining current ad growth rates would be increasingly difficult as Facebook’s ad business matures.
Facebook doesn’t break out revenue derived from individual units, but eMarketer recently pointed to a bright spot for the company.
By 2017, Instagram's global mobile ad revenues will reach $2.81 billion -- accounting for over 10% of Facebook's global ad revenues -- according to eMarketer. If accurate, Instagram will then have higher net mobile display ad revenues than both Google and Twitter. This year alone, Instagram will rack up $595 million in mobile ad revenue around the globe, eMarketer expected.
The research firm attributed the “rapid growth” to high demand for Instagram’s new ad products, which -- coupled with better measurement and targeting features -- are expanding beyond branding to include direct response and the ability to buy ads via API.
This year, Instagram's ad revenues will make up 5% of Facebook's mobile ad revenues -- a share that will increase to 14% in 2017 -- eMarketer predicts. For its three-year forecast, eMarketer notes that the vast majority of Instagram’s ad dollars will come from within U.S. borders. Indeed, the U.S. will account for 92% of Instagram’s total in 2016, and 85% in 2017.
That said, the research firm forecasts that Instagram will have just $30 million in ad revenues outside the U.S., this year -- or 5% of the total. Along with the U.S. market, Instagram advertising is presently available in Australia, Brazil, Canada, France, Germany, Japan and the UK.