With Ad Revenue Growing Next Facebook Step Should Be Shopping
Yesterday Facebook released its second quarter revenue. The numbers were quite impressive. The social media giant announced that it had earned nearly $2.68 billion.
At this point we have learned not to underestimate Mr. Zuckerberg and his determination to become one of the most powerful media forces on the planet. However, something that might not have been expected was how much of the company’s ad revenue came from mobile; roughly 62% of it, just north of $1.66 billion. Not only that, but nearly 30 percent of Facebook users said that they only log onto the social network via their smartphone or tablet.
Considering that just a few years ago, when Facebook’s newly issued stock was stalling, experts were wondering if the site could ever truly generate a return on investment for advertisers, this has certainly been a change of direction. Not only has the company made brands more comfortable with it from a marketing standpoint, but Facebook has also made a concerted effort to break more into mobile. The company has purchased entities such as Instagram and WhatsApp, both mobile apps.
In addition, the newsfeed greatly lends itself to a different kind of online advertising, as all mobile ads are found in the feed itself, not in sidebars or headers.
Facebook has also been looking into other avenues of ad revenue, including extending its third party ad network. But the next overall step for Facebook should be finding a way to actually turn that ad revenue into consumer revenue. While hitting new highs for mobile reach is an achievement, it likely won’t mean anything in the long run if there is no way to prove it actually leads to dollars in advertisers’ pockets. While it seems impossible now, the fact is that at some point Facebook users will hit their peak and the numbers will begin to decline. At that point the social network will have to look at new ways to increase revenue, and that might just have to be making the site an online shopping destination. Before you say it will never happen, just think back to a time when we all thought Facebook would never crack mobile.