In the previous quarter, Facebook (FB) has seen a significant increase in almost all of its verticals, market segments, and regions. The company’s ad revenue grew by 56.8% in 4Q15 where the majority of growth came from the US and Canada and Asia-Pacific regions with 64.5% and 56.7% growth, respectively.
In China (FXI), businesses have positively embraced Facebook and the Instagram platform for advertising to reach people internationally. Moreover, during the call, the company stated that it will continue to focus on its three priorities: “capitalizing on the shift to mobile; growing the number of marketers using our ad products; and making our ads more relevant and effective.”
Shift to mobile
Facebook’s mobile monthly active users (or MAUs) constitute 90.6% of total MAUs, which stood at 1.6 billion in 4Q15. The results indicate the significant shift of consumers towards mobile devices, which is influencing marketers to catch up with the trend. For marketers, the dilemma for spending on ads shifted from “where” to “how.” Facebook and Instagram have become the major platforms for mobile spending, which together now account for more than 20% of users’ mobile device time in the United States, according to the company.
Increasing active advertisers
Facebook’s second priority is to bring in more advertisers by leveraging its ad products such as carousel ads and dynamic product ads. Recently, it has come up with Canvas ads and Slideshows, which give a video-like experience and work well with lower connection speeds and feature phones. In 3Q15, the company’s active advertisers stood at 2.5 million, and since then, the company’s advertiser growth has remained strong. Moreover, “98 of the top 100 advertisers on Facebook also advertised on Instagram in Q4,” according to Facebook.
Improving ad relevance
Advertising has been the key source of earnings for Facebook as marketers shift from traditional advertising to more data-driven and user-specific advertising. Facebook uses programmatic ads, which target ads based on information generated online by users. Moreover, the company provides advertisers with measurement tools like Conversion Lift and the Facebook Pixel, which help drive business results and make ads more relevant.