Facebook Earnings: Mobile Growth Now, More on the Way
Published: April 18, 2014
Author: Dayna Moon
In anticipation of Facebook’s Wednesday quarterly earnings call, we did a quick “check-in” to gauge account performance across a variety of advertiser objectives and verticals. The story is clear: we have yet to realize the full potential of mobile, and as Facebook continues to release advanced targeting features, we can expect continued market interest and growth in ad revenue in the quarters to follow.
Analyzing our top accounts, we found a few surprises, but overall the numbers are in line with expectations. As previously stated by Facebook, 53% of ad revenue is attributed to mobile in Q4 alone, up from the reported 49% in Q3, and that arrow will continue to point north; our own overall Facebook campaigns show a 45% increase in mobile spend quarter over quarter.
Early insight into Q1 shows CTRs climbed at an average rate of 38% month over month (blended averages of January to February and February to March), while CPCs dropped steadily over the same period. Desktop ad units continue to post strong performance, showing similar trends as mobile, with CTRs gaining momentum in blended month over month averages and slightly lower CPCs no doubt a direct correlation of Facebook’s recent redesign and enhanced targeting capabilities.
Arguably Facebook’s most engaging ad unit, Mobile App Install Ads have become a clear “go-to” for marketers across several verticals as adoption increases and targeting and functionality improve.
Our data (all blended month-over-month averages) shows that iOS devices are leading the pack, posting a 43% higher CVR rate overall on IOS vs. Android with a 37% higher CPI to match. With the ability to layer in custom targeting, usage and the average CPI should continue to rise as expected with the amount of advertisers and apps entering this highly competitive environment. Lookalike audiences, first introduced to the desktop environment in March of last year, have opened the door for marketers looking to target people who“look like” their fans; that has been extended to mobile with the ability to target fans who have used a particular app (most commonly those who have made a purchase via a brand’s shopping app).
In comparing the performance of targeting across devices, lookalikes are the clear winner, generating a 15% higher CVR rate on Android devices and almost 2x higher on IOS platforms vs. category targeting. Lookalike targeting CPIs were also more expensive on IOS at a modest 10% over Android.
It’s safe to say we’ve moved beyond the “Year of Mobile” to the “Decade of Mobile” and can continue to place bets on the next targeting craze. I’m rolling my dice on the geo side, as Facebook announced an optional rollout of the “nearby friends” feature early this week. Marketers are likely to see this feature “pop-up” sooner rather than later.