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It’s no secret that Facebook has been furiously working to silence the critics who keep talking about its “mobile problem”: the social network has revamped its mobile apps, started rolling out a more mobile-centric look to News Feed and launched its new ‘apperating’ system, Facebook Home, to cement its place on your phone. Why is this all so important? Because more and more of its users are Facebooking on the move.
According to the social network’s Q1 financial report, it passed the 751-million mobile monthly active user mark at the end of March this year. That’s an increase of over 54% from the same month in 2012. With a total monthly active user base of 1.11-billion, that means that over 67% of Facebook users who log in every month do so from a mobile device.
So how are Facebook’s plans to make money from all those users that skip the desktop going? The company says that revenue from mobile advertising accounted for just 30% of its total advertising revenue in the first three months of 2013 — that’s around US$375-million of the US$1.25-billion in advertising revenue it pulled in from January to March. Still, that number is growing — mobile accounted for 23% of its ad revenue in the last quarter of 2012, and only 14% of ad revenue in the three months before that.
One of Facebook’s new mobile ad options, which allows advertisers to promote their mobile apps in sponsored posts, seems to be one of the major success stories for the network at this earnings call. Facebook COO Sheryl Sandberg said that over 3800 developers have opted to test out the ads, which allow users to simply click on a Facebook ad to be taken to the relevant app store and install the developers’ app. These mobile ads lead to over 25-million app installs, with over 40% of the top 100 Android and iOS app developers purchasing an ad in the last week of this quarter.
It’s a targeted system that seems to be working, as Facebook users get to the Google Play or App Store directly, instead of being routed through a website or Facebook page first. Although CEO Mark Zuckerberg didn’t disclose exactly how much of its mobile revenue was being generated by the ads, he did say the company is “starting to see real revenue from mobile app installs” and that is “one of our most important new ad products.”
Of course, we’ve yet to see how Facebook plans to monetise Home — the Android-only app-slash-launcher that could potentially bring ads to your phone’s home screen along with your friend’s latest updates. At the launch, Zuckerberg said that while there are no ads in the first version of the app, he’s sure that “at some point there will be”. The company is also sitting on a potential goldmine with Instagram, which is still ad-free with more than 100-million monthly active users. Although that’s a move it’s going to have to think about carefully, considering how well Instagram’s last attempt to ready itself for advertising was received.