The year has clearly begun too well for Facebook. The social networking company’s fourth quarter report, and the earning for the full year 2015, released on January 27, 2016, saw a 51.7 percent jump in revenues as new advertising formats and an improved mobile app drove steep rise in advertising.
It was also done by wooing users and advertising dollars in emerging markets such as Africa. Despite users in some of these countries being on slow connections, Facebook has been successful in convincing advertisers to pay to reach them.
“With the new addition in my family I’ve been reflecting on the legacy we want to pass on to the yet next generation. I’m excited about our progress and the chance to build great things for the future. If we continue to focus on the fundamental challenges of bringing the world closer together, we can create a better world for the whole next generation. That’s what I think about every day as we think about as we continue to build Facebook. Our strategy is working and we have many more opportunities ahead. So we’re going to keep investing to deliver greater results over the long term. 2015 was a great year for Facebook. Our community continued to grow and our business is thriving,” said Mark Zuckerberg, Founder and CEO, Facebook.
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With regards to advertising revenue, Facebook also beat analysts’ average expectation of USD 5.15 billion with USD 5.64 billion in this quarter. Mobile advertising revenue, meanwhile, came in at USD 4.51 billion against expected USD 4.09 billion. Mobile advertising revenue represented around 80 percent of advertising revenue for the fourth quarter of 2015, up from 69 percent of advertising revenue in the fourth quarter of 2014.
Ad impressions on mobile also increased 29 percent on a year-over-year basis. David Wehner, CFO, Facebook pointed out that 2015’s final quarter was the first since Q3 2013 in which total ad impressions increased against the year ago period.
Moving forward, Facebook could potentially devise a new Instant Ads format that would give brands a fast-loading rich media of Instant Articles, so users aren’t discouraged from clicking. Facebook also announced that it’s expanding its mobile ad network from apps to mobile websites, which could further boost revenue without Facebook needing to show more ads on its own properties.
At present, there are more than 2.5 million active advertisers working with Facebook and the average revenue per user (ARPU) is of about USD 3.73, while as per reports, Wall Street had only expected USD 3.43.
“Facebook is providing a very efficient method of distribution for advertisers. They are making big investments and, evidenced by their quarterly performance, it seems to be working,” said Ken Sena, Analyst, Evercore ISI.
Other highlights from the earnings include:
• 100 million hours of video watched per day
• 1 billion users on Groups
• 80 million users on Facebook Lite
• 500 million users on Events
• 123 million events created in 2015
• 50 million small and medium sized business on Pages
