Facebook’s 1 billion daily mobile users push Q3 revenue to $4.5bn
On Wednesday, Facebook revealed its Q3 report, which showed it now reaches 1 billion users per day and has revenues of $4.5bn, a 41% YoY hike. Mobile advertising accounted for 78% of Facebook's total ad revenue, making $3.4bn in Q3, bolstered by 1.39 billion of the 1.55 billion users Facebook services each month accessing Facebook via mobile. In a Facebook post Mark Zuckerberg explained how Facebook's user base was growing adding that, "through Internet.org, more than 15 million people now have access to the opportunities of the internet who didn’t before." Unsurprisingly, video has also grown on the platform, following the launch of autoplay videos and Facebook’s dedicated video channel, which receives 8 billion daily video views.

Additional reporting by Minda Smiley.

More than 8 billion video views happen on Facebook each day, according to chief executive Mark Zuckerberg as the social network steps up efforts to get advertisers to solely create content for the platform.

That figure is up from the 4 billion it reported in April and comes as it tests a dedicated video channel as well as raft of ad tools for its recently launch autoplay video ads. The claim aims to further enhance Facebook’s bid for the ever-expanding video advertising pie. Figures from the Interactive Bureau of Advertising found that total UK video spend hit £292m in the first half of 2015.

While impressive, Facebook’s latest video boast is likely to be met with skepticism by some members of the advertising industry. WPP boss Sir Martin Sorrell has slammed the site’s video metrics as “ludicrous” and said their standards for a view are much lower than on television – Facebook charges for videos that are viewed for three seconds as someone scrolls through their news feed. The technology business moved to temper these concerns last month by opening up to third party viewability verification.

“Over the next few years, video is going to be some of the most engaging content online, and by continuing to innovate here, we have a chance to build the best place to watch and share videos,” said Zuckerberg on an earnings call last night (5 November) for its quarterly results.

Yet for advertisers looking to spend more on video, the social network is still not able to provide a premium advertising environment capable of delivering strong impressions. Ad prices rose 61 per cent year-on-year in the three months to September, while ad impressions dropped 10 per cent due to the smaller margins to be made on mobile. Video is seen as a way of addressing this gap with content capable of delivering stronger ROI.

While Facebook has tried to encourage media companies to post more content directly onto the site through Instant Articles, premium news sites are still the home of the very best writing and journalism," said Justin Taylor, UK managing director of Teads.

"Brands don’t just want their creative seen by a lot of people, but by the right people in the right context. That's why many clients are combining social campaigns with video ad spots on the sites of premium publishers. The introduction of outstream video ad formats is opening up vast swathes of new premium inventory on these sites to fulfil demand and they will continue to be a popular choice for brands seeking both scale and safety."

It comes as the social network’s revenues hit $4.5bn in the quarter, representing a 41 per cent year-on-year hike, with mobile advertising accounting for over three-quarters (78 per cent) of total advertising revenue. Facebook reported total advertising revenue of $4.3bn during the quarter – the social network also recorded $202m in payments - representing a 45 per cent year-on-year increase (see chart below).

Notably, mobile advertising accounted for 78 per cent of its total advertising revenue - up from 66 per cent from 12 years beforehand - with the outfit also recording 894 million mobile daily active users (DAU), up from 27 per cent 12 months beforehand.

Facebook's total DAU were 1.01 billion during the period. Facebook will present the numbers before financial analysts later today (4 November), with the call streamed live on its investor relations page.

Zuckerberg said: "We had a good quarter and got a lot done. We're focused on innovating and investing for the long term to serve our community and connect the entire world."

During the company’s quarterly earnings call, chief operating officer Sheryl Sandberg said Facebook is continuing to invest in all of its ad platforms like Atlas and Audience Network.

She also mentioned that pairing Instagram’s creative format with the back-end infrastructure plus targeting capabilities that Facebook has helps brands take users on a two-platform “visual journey” and that the two are not viewed as competing channels – their main competition is other forms of media.

“We think we’re at the very beginning of what’s possible when we combine these two,” she said. While some clients are upping their Instagram ad budgets, she noted that some have been shifting their Facebook ad dollars to Instagram.

Sandberg also said Facebook is working hard on its direct response offerings – like its carousel ads. She used a recent example of their effectiveness when discussing how Ikea wanted to increase its online shopping sales during the time that its stores are closed in Norway, and was able to turn a $35,000 investment into $2m in sales.

Chief financial officer of David Wehner noted during the call that the average price per ad is up 61 per cent for the quarter. He said that drivers of mobile growth include strong advertiser demand, more people spending more time on Facebook, and better ad quality.