The Drum caught up with industry experts in the social media and mobile advertising world to see what this will mean.
James Hilton, global CEO, M&C Saatchi Mobile
Facebook's Q1 results have solidified the fact that not only is mobile a viable, credible media channel, but that a mobile-first culture is now a widespread practice. With one billion active mobile users on Facebook, the opportunity to reach almost 15 per cent of the world’s population cannot be ignored. Marketeers quickly realised that the data Facebook collects combined with its infinite targeting and scale makes its mobile advertising offering very effective, which its financial results are clearly showing. We have been involved in Facebook and other social platforms as soon as their mobile products were released. This access to data, matched with the rise in programmatic technology allows us to buy more intelligently and more efficiently, giving our clients higher value users at much lower acquisition costs. With improved data and products comes wider opportunities, and we are now running numerous successful retargeting campaigns via Facebook mobile and other social mobile solutions with extraordinarily strong results in terms of engagement and ROI.
Ben Wood, Global president, iProspect
It’s hard to imagine how Facebook came so badly under fire over its mobile game just over a year ago. In response, it doubled down on development – and it’s paid off. Its app is high quality, the ads product is as good on mobile as on desktop, and with autoplay video we are starting to see a strong mobile-first offering too.It’s not been all smooth sailing – like many ‘desktop’ powers, Facebook has struggled to unbundle its products to compete with single-purpose apps. It has released Poke, Paper, Home, Camera and Messenger all to varying degrees of success. The last thing Facebook wants is to be blindsided by one of these specialist offerings, and this was probably a major factor behind the empire-building purchases of WhatsApp and Oculus Rift.But ultimately, more users are using more mobile devices more often and in more ways. This is especially true for valuable emerging markets, where the diminished income per user is mitigated by sheer volume: countries like Mexico, India, Brazil and Malaysia are often characterised by consumers ‘skipping’ the desktop phase entirely, moving straight to mobile. Facebook will be delighted that it is riding this trend as successfully as it is. As far as Zuckerberg and co are concerned, these figures will represent phenomenal progress. And Facebook’s stakeholders – advertisers and investors alike – will be happy too.
Laura Jordan Bambach creative partner, Mr President
It's unsurprising that they're raking it in through mobile ads, with 609 million mobile users. Urban myth says that first thing in the morning, so many people are checking their newsfeed on their mobile phone in bed, that it causes a genuine spike in Facebook activity. And all the while their sleepy, pre-coffee heads are being filled with advertising (particularly for App downloads, which are the biggest success story in mobile advertising at the moment).FB is the social media equivalent of motorway services: they've got a captive audience (such is their size and ubiquity) and they can do (and more importantly charge) what they like. In fact, the general industry line is that Facebook is fast moving to becoming a mobile ad company. Which is great for brand managers looking for reach into the millions, for a more cost effective ROI than television. Not so great for the creativity their platform offers.Seems to me that F-Commerce, from your mobile on the move, will be made really easy, accessible and something we all start doing all of the time. It's obvious that Facebook will eventually become a massive shop window. Which means that new and more inventive ways to share content, make connections and be truly social will be created outside of Facebook as a result. The next gen of social, I guess.
Robin Grant, global managing director, We Are Social
We've known for a while that cracking mobile would be crucial for the future of Facebook, and Zuckerberg and team answered critics by proving they're able to turn mobile ads into revenue, helping them exceed Wall Street's expectations. Facebook has been very open about its investment in and focus on mobile - its acquisition of WhatsApp being the obvious recent example. With the platform passing the one billion mark for monthly active users on phones and tablets, Facebook has both the audience and the products it needs to attract advertisers. Facebook receives a fairly regular flow of criticism for its transformation into an ad focused platform, but this doesn't appear to have impacted on user behaviour. In fact, the average time users spend on the platform has increased, suggesting that the regular reports stating people are getting tired of Facebook are just what the naysayers are hoping for, rather than what is actually happening in reality.
John Perkins, managing director, RAPP
It’s fascinating that Facebook’s mobile advertising earnings have succeeded Wall Street’s expectations. Only two years ago analysts were raising big doubts about the success of the Facebook IPO because they believed that it couldn’t make money out of mobile advertising.But Facebook clearly understands the importance of mobile: as many as 80 per cent of their users access the site on a mobile platform. And the acquisitions of Instagram in 2012 and that of Whatsapp this year show that it is very serious about it.Yet Facebook is also all too aware of the risks associated with mobile advertising. It knows there is nothing more personal than your mobile phone - just try giving yours to someone else to see how uncomfortable it makes you feel. So it is treading carefully.But we are just at the beginning of the mobile advertising journey. Location-based advertising to mobile users on Facebook can’t be far away.The challenge for Facebook is striking the value exchange balance – advertising that ideally adds value to the user experience, or at least does not piss off users enough to go to Google Plus.
Alex Kozloff, head of mobile, IAB
In the IAB/PWC 2013 Digital Adpsend report, mobile crossed the £1bn barrier (£1.03bn), hitting a major milestone in the UK. Today’s results from Facebook continue this trend into Q1, as the figures are jammed full of facts that really hit home the importance of mobile. Not only are there more than a billion mobile monthly active users, but these users are bringing in mobile revenues that is worth over $2.2bn to Facebook. This is a strong start for 2014 and a great indicator for what the rest of the industry can expect for H1 2014.
Jonathan Simmons, board director, Zone
A fantastic set of Q1 results from Facebook. But not completely unexpected: brands on Facebook have benefited from organic reach – unpaid reach – for years. Now Facebook is requiring that brands pay to reach its fans. That’s great for sales, but it places huge emphasis on the effectiveness of the ad tools. The results have to justify the increased spend, and that’s something that will take a little longer to become clear. As to whether the growth is driven by mobile: obviously it is, but so is everything else. We live in a mobile world. I’d find it much more surprising if mobile wasn’t a factor.
Tarek Nseir, founder and CEO, TH_NK
Facebook announced 800 million active daily users in March last night, while pulling in a remarkable 82 per cent increase in YOY advertising sales. But for agencies and clients alike the heavy decline of organic reach for branded pages on Facebook is a critical turning point. Are we being short changed by Facebook, who for years advised us to grow brand pages aggressively? The industry hasn’t really reacted yet; the admission from Facebook that no natural reach is inevitable is too new and too sore to have garnered well thought through responses yet. Watch this space.
Wolf Allisat, senior VP of international, Ensighten
Whilst Facebook’s results are promising, the social network remains in a distant second place to Google’s share of the global digital advertising market (5.8 per cent for Facebook vs 32 per cent for Google in 2013 according to eMarketer). What’s more interesting than the ad revenue growth – which appears to be slowing due to the company taking its time to release its video ad propositions – is how fast it’s caught up in terms of its mobile advertising, which has almost doubled from 30 per cent in Q1 20113 to 59 per cent in Q1 this year. Mobile engagement is now a critical part of the majority of customer journeys, which we’re seeing increasingly from how digital conversions are attributed across all marketing touchpoints. From show-rooming to researching to simply surfing the web, customers have come to expect the same brand quality and refined user experience on a mobile that they experience on the web. In response, companies need to work hard to measure and analyze user data, then design a powerful mobile experience that helps their users navigate, shop, research and do everything that they could do on a desktop, but on a handheld.
Victor Malachard, CEO and co-founder, byyd
First came the social media revolution in the early 2000s, and now the mobile social media revolution is well and truly underway – with mobile advertising playing a key role. Facebook helped to pioneer social media advertising, but can’t escape the fact that consumers are increasingly switched on to mobile as well as social. Smartphones and tablets are indispensable to our daily lives, and so mobile needs to be made central to this social media giant’s business.Mobile occupies an increasingly prominent position in the digital marketing mix, and brands and marketers are sitting up and taking notice. Take the IAB’s latest findings about the UK digital ad industry: mobile now represents just over a third (35 per cent) of total digital social media advertising.Facebook’s Q1 results are further evidence of the power of mobile advertising.
Paul Bennun, chief creative officer, Somethin’ Else
Facebook results are, year by year, becoming a barometer for Zuck's reinvention of his company and of the state of telecommunications. That's because Facebook isn't a social network anymore. It's an investment organisation that owns the biggest social network. Its business is to own tomorrow's communications technologies, and its tool is an extraordinary price-to-earnings ratio, which means it can outbid anyone in the world as it agglomerates other businesses which may or may not be important. Zuck is Buffet, not Jobs. Fantastic mobile earnings are a sign Facebook's tactics are — currently — as strong as its strategy.
Jeremy Arditi, UK general manager, Ebuzzing
Facebook’s results are extremely impressive and reflect well on both the company and the mobile advertising industry as a whole. Mobile advertising has proved a difficult nut to crack over the last few years, but with the IAB adspend report showing mobile adspend has grown by 93 per cent year on year, and mobile video growing by a staggering 346 per cent, it’s safe to say mobile advertising has finally come into its own. Facebook’s announcement is exciting news for brands, media agencies and distributors throughout the advertising industry.
Ruro Efue, social media strategist, Vizeum UK
With 59 per cent of their revenue coming from mobile, it also seems inconceivable that Facebook had a mobile problem only two years ago. At the time the majority of their ads were on the right hand side rail and not in the newsfeed which meant that mobile users were not exposed to any ads. The shift in ads from the right hand rail to native ads in the newsfeed was an inspired move as it allowed Facebook to not only serve ads that were appealing to brands, but also to serve the same ad across both desktop and mobile. This is a really key factor as it means that advertisers can reach mobile users without creating new formats and thus do not have to answer the same questions that non-native mobile advertising are asked; limited impact and creativity due to small real estate and user annoyance due to large or full screen pop up ads. The winners in mobile advertising in the near future, will be the publishers that offer native formats that work across all screens that do not require advertisers to even ask about mobile or desktop.