Facebook Advertising Does $1 Billion in Q2.Written by Michael Levanduski
July 26, 2012 # 6:38 pm # Industry News, Specials # 8 Comments
Those advertisers who use Facebook for advertising, as well as those who are looking into doing the same have been patiently awaiting the results of Facebook’s quarterly earnings report for Q2. Today, that information was released by Facebook and the results seem quite satisfactory. Although Facebook was bound to recover from its advertising issues in the past, I don’t think anybody expected it to happen so fast. In the long run, it’s easy to understand that Facebook would be a valuable advertising source, bringing in quite a bit of revenue from marketers alone.
To start, Facebook has released some pretty incredible numbers, stating that 84% of their revenue in Q2 came from advertising revenue. In total, Facebook brought in $992 million from advertising alone, which is a large fraction of their total quarterly earnings of $1.18 billion. These earnings, however, are far from Facebook’s actual overall worth, which stands at a baffling $60 billion. Facebook has always been quite a successful firm, but advertising has never really been it’s claim to fame. Now, with the percentage of the total revenue that Facebook receives from advertising, it could be evidence that Facebook’s name might be changing for marketers, and that it is doing very well in the area after all.
During the quarterly earning announcements, Facebook mentioned their acknowledgement of the importance of mobile strategies. According toMark Zuckerberg, as reported in a ClickZ article by Kate Kaye, Facebook is, “dedicated to better monetizing the mobile usage explosion. Because mobile users spend so much time on their news feeds – where Sponsored Stories ads appear in the mobile platorm.” It’s been reported that just about half of the revenue generated through sponsored stories comes from Facebook’s highly successful mobile platform. It seems that mobile is what the company is most excited about, as it’s results are proficient.
Along with announcing their earnings for Q2, Facebook took the opportunity to release information officially on some new advertising ideas, most of which we’ve already learned of from rumors and leaked information. Anyway, Facebook described in depth the rotating marketplace ads on static pages that optimize ad serving. Also, they explained a new real-time ad exchange and announced that it doesn’t allow for mobile inventory with Facebook’s DSP partners. The company also stated that it was planning to improve further on the way sponsored stories and advertisements on the network are currently performing.
So, regardless of the IPO issues that the company received quite a bit of criticism for, their advertising seems to be in ship shape, so to speak. Facebook has actually taken the criticism that they’ve received and learned from it, revamping advertising techniques based on what they learned from their critiques. The surprise here isn’t Facebook’s earnings, because Facebook has always brought in substantial revenue. The shocker is the percentage of that revenue that has come from advertising, and how much it has grown since this time last year (up 28%). So, Facebook will definitely continue to be a main source for social media marketing.