This Tuesday, Facebook, Inc. (FB) made a couple of important announcements regarding its advertising business. First, the company revealed that its active advertisers’ base has achieved a milestone by crossing the 2 million mark. The second announcement was that Facebook has launched a separate Ad manager app for iOS users.
Following the news, the company’s shares gained around 1.41% in yesterday’s trading session, closing at $79.56.
Facebook had reached the 1.5 million mark in Jul 2014, and now only seven months later, the social networking site’s active advertisers’ base has grown to a remarkable 2 million figure. The company has gained significant traction in its mobile ads business within a very short span of time. Though 11 years old, the social media company turned its focus to advertising only since 2012.
Facebook’s advertising revenues are benefiting from factors like increasing mobile engagement, a higher number of marketers, continuing investment in new products and the robust performance of its newsfeed ads.
In the recently reported fourth-quarter 2014 results, advertising revenues rose 58% year over year to $3.7 billion. Of these, 69% of ad revenues were generated from mobile ad revenues, which surged a remarkable 108% on a year-over-year basis to $2.5 billion. Even, ad revenues from desktop increased 1% despite a slowdown in desktop usage.
Of late, the company has been undertaking a number of initiatives to drive its advertisement revenues. In the last quarter, it redesigned the right hand column ads that led to a robust 335% year-over-year increase in the average price of a Facebook ad. Also, Facebook recently launched its Product Ads feature that allows retailers and marketers to efficiently showcase their product catalogs to users. The company’s ‘identifying experts and influencers in a social network’ patent win is enabling it to enhance the feature.
Now the company has developed a separate advertisement app for iOS users. Earlier, the ad manager feature was part of the main Facebook app. However, in order to gain more flexibility, the company deemed it fit to have a separate app that would allow advertisers to manage all advertisement-related functions, ranging from creating ads, editing existing ads to managing ad budgets and schedules. In addition to these, advertisers are also expected to benefit from features like push notification and ad performance tracking.
The company also noted that a similar app for Android is in the pipeline and should be launched later this year.
Facebook is leveraging its huge user base and its ability to track personal details to grow its share of online ad dollars. These efforts should also help this Zacks Rank #3 (Hold) company maintain its place in the industry despite stiff competition from other technology giants like Google Inc. (GOOGL), Twitter, Inc. (TWTR) and LinkedIn Corp. (LNKD).
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