Facebook is knocking on the door of bringing in $3 billion in a single quarter — and that might just be a stepping stone.
The company announced Wednesday that Q2 was its highest-performance quarter to date, with revenues of $2.9 billion and worldwide growth in revenue-per-user. They’re just getting started.
Much of Facebook’s economic growth of late has come from mobile. The highly-touted mobile app install ad has led to more than 350 million app installs, and the ad format is moving beyond games and into retailers and consumer packaged goods verticals. CEO Mark Zuckerberg said that U.S. users spend an average of 40 minutes per day (including 1 of 5 minutes on mobile), but he wants a bigger slice of the digital media pie.
Mobile now accounts for 62 percent of Facebook’s ad revenue, and that figure could rise in the next couple years as Facebook develops more relevant and targeted video ads in concert with Audience Network — both of which are still in their infancies.
Facebook will announce its financial results for Q2 on Wednesday, but several other firms are reporting another great quarter for Facebook ad results. SocialCode, a Facebook Strategic Preferred Marketing Developer, said clients really performed well in Q2 — with the World Cup being a major motivating factor.
Max Kalehoff, SocialCode’s Senior Vice President of Marketing, summed up the company’s clients’ performance this quarter:
Q2 continued the same triple-digit growth we saw in Q1. Our portfolio of Fortune 500 advertisers nearly doubled total spend with us in Q2 versus Q1. We saw a lot of investment around the winter Olympics, but the World Cup was a whole different scale. It laid to rest any question about the potential of global events and real-time marketing to be an extraordinary catalyst to help brands reach and engage with their customers on social media.
Kalehoff also sat down with Inside Facebook for a closer look at how advertising on Facebook has grown in the past quarter.
As Instagram slowly starts to mix in some advertising, the major question for the photo-sharing app is how it will become a source of monetization for Facebook. While Facebook CEO Mark Zuckerberg or COO Sheryl Sandberg might address the early effects of Instagram advertising in its Q2 earnings call on July 23, it’s worth noting that Instagram ads are still in their infancy.
How new are Instagram ads? In a Fortune story published recently about Instagram, noting that CEO and Co-Founder Mark Systrom still personally reviews each ad the limited subset of advertisers design for the app. Instagram first allowed advertisers who already appealed to core segments of Instagram’s user base.
The feature story shed some light on newer features, such as Instagram Direct and video. In the past month, 45 million Instagram users (about 25 percent) have either sent or received a message through the app.
However, the video feature hasn’t been as successful, Fortune reports.
Facebook is testing a new way for users to discover more videos from their friends.
According to TechCrunch and sister site AllFacebook, Facebook for iOS users are seeing a prompt to watch more videos when the click on a friend’s movie. Facebook confirmed to TechCrunch that it’s something the site is testing:
This is a new feature we are testing on mobile to help people find more videos they might be interested in.
This does not appear on ads, only on videos that users have uploaded directly to Facebook, and not other sites such as YouTube.
Video ads are the next big thing for Facebook, something enforced by today’s news of Facebook’s acquisition of advertising tech company LiveRail. Terms of the deal were not disclosed.
LiveRail, founded in 2007 and based in San Francisco, has worked with ABC, Major League Baseball, A&E Networks and Gannett to improve the quality of ads seen in videos.
Brian Boland, Facebook’s Vice President of Ads Product Marketing, explained how LiveRail will help Facebook:
We believe that LiveRail, Facebook and the premium publishers it serves have an opportunity to make video ads better and more relevant for the hundreds of millions of people who watch digital video every month. More relevant ads will be more interesting and engaging to people watching online video, and more effective for marketers too. Publishers will benefit as well because more relevant ads will help them make the most out of every opportunity they have to show an ad.
We’re just getting started with our partnership with LiveRail, but we’re very excited about the future for video publishers and marketers. We believe that LiveRail’s excellent product – known in the industry as a video supply-side platform or SSP – and Facebook’s expertise with relevancy, delivery and measurement will help us make video advertising much better for everyone.
Increasing numbers of Facebook users are watching video, so the company announced today new ways of making sure that users see the videos most relevant to them. Facebook notes that video viewership has doubled in the past six months.
A video’s weight in the News Feed algorithm will now take into consideration how long a user has watched a video, in addition to number of views and engagement metrics such as likes, comments and shares. People who watch more videos should see more in the future, and those who scroll past videos will likely see fewer videos.
Facebook is trying to offer more tangible value to marketers who utilize video, adding a call to action prompt to page-posted videos that allows viewers to get more information about a company or product after viewing the video. The company is also allowing marketers to optimize campaigns based on reach and frequency — taking a page from the way advertisers buy television ads.
Marketers can also optimize ad campaigns for video views.
Facebook wrote about the new capabilities available through video:
Advertisers will also be able to encourage people who have viewed their videos to view additional content with two new solutions.
First, advertisers who work with a Facebook account representative can work with us to create audiences of people who have already watched their videos. Ads can be created for those specific people, helping to move them from awareness to affinity and consideration.
A second way advertisers can encourage people to engage more deeply with their brand and products is by adding a call-to-action inviting people to learn more and visit a destination of their choice, like a specific page on a website, after viewing the video.
Facebook has been testing auto-play video ads (premium video ads) in the News Feeds of U.S. users since December, but now people in Australia, Brazil, Canada, France, Germany, Japan and the United Kingdom will start to see them as well.
Facebook announced Tuesday a more international rollout of its mobile and desktop ad format, where a 15-second spot plays automatically as the user scrolls through the News Feed without sound. If a user taps the video ad, then it will show in a full-screen format with sound.
Facebook wrote about this on the Facebook for Business blog:
With Premium Video Ads, brands now have another way of engaging people on Facebook with compelling video experiences. We’ll roll out Premium Video Ads slowly and monitor how people interact with them. This limited introduction allows us to concentrate our efforts on a smaller number of advertisers with high-quality campaigns to create the best possible experience on Facebook. People can expect to begin seeing these new ads over the next few months.
Facebook also announced deeper video analytics available to marketers.
Facebook executives spoke glowingly of video in the Q1 2014 earnings call, and now we can see why. Facebook confirmed that NBC is the first major U.S. TV network to buy in to Facebook’s premium auto-play video ads.
NBC has launched an auto-play video ad campaign on Facebook to promote three shows: “Rosemary’s Baby,” “The Night Shift” and “Undateable.” The ads started 12:01 a.m. EST Wednesday and will run for 24 hours, showing up in News Feeds of Facebook users 18 and older.
As more advertisers and page managers use video to get their brand’s message out, Facebook is launching new ways for admins to measure the effectiveness of their video campaigns.
Currently, page admins can only see information such as the number of views a video has received. With the new video metrics — rolled out over the coming weeks — marketers can see the average duration of video viewed and the amount of time that a person watched 95 percent of the video.
Advertisers will also be able to see demographic breakdown of the video’s viewers.