Facebook Q2 Earnings: More Users, More Mobile, More Opportunity

July 28, 2016

Digital Marketing Bradley Hearn By Bradley Hearn

Over a decade after Facebook revolutionized the online landscape, basically inventing the concept of social media and forging a new era of how internet users interact, Facebook continues to prove that it still has its finger on the internet’s pulse. Last night, in its Q2 earnings call, the social media giant announced that its revenue grew 59% year over year to $6.4 billion for the quarter.

But here’s the kicker: 84% of that revenue was from mobile devices.

Facebook may not seem as revolutionary (or even as cool) as it once was, but Zuckerberg and crew are still completely dialed in to where the users (and shoppers) are headed: mobile devices.

Some other impressive stats from Facebook’s strong Q2: Net income tripled to $2 billion (it now has $23 billion in available cash); and active monthly users jumped 15% to 1.7 billion.

But first, let’s talk about mobile.

It’s a mobile world. But you already knew that.

According to Facebook, one billion of its active users use mobile devices to access it. That’s 22% higher than a year ago. Online retailers wondering where to focus their campaigns moving forward should look at this stat with extreme interest. Quite simply: if you’re not focused on mobile strategies, you’re going to be left behind by retailers who are.

Mobile’s also been a key player in driving up ad prices, which are up 9% due to the fact that on mobile there is no right-hand column, and therefore no lower-priced right-hand column ads. And yet the cash still keeps pouring in.

Now back to the one billion mobile users. That’s one billion reasons for retailers to take advantage of the mobile-only ad formats that Facebook has to offer. Carousel ads, which have also been introduced by Google, not only confirm the critical importance of mobile, but also the increasingly visual culture that advertisers need to target to stay afloat.

The 500 million monthly users of Instagram (owned by Facebook) also emphasize the importance of visuals in today’s e-commerce landscape. Again, Facebook is on the front lines, encouraging and enabling users to view more videos and expanding the live video function to the public. Zuckerberg said on the earnings call: “We’re particularly pleased with our progress in video as we move towards a world where video is at the heart of all our services.”

Everyone (and your mother) is still on Facebook. Target them.

Given how many active users Facebook reported, the platform is a perfect place to use retargeting campaigns, such as Facebook Dynamic Ads (which also extend to Instagram).

Many retailers and brands have caught on. According to Facebook, over 300 million people now see dynamic ads each month, and over 2.5 billion unique products have been uploaded by marketers.

In her Facebook post, Sheryl Sandberg gave several examples of successful cases of businesses using Facebook’s promotional products to grow their revenue. She cited the success of clothing company Shinesty and Texas-based lighting company Lighting Etc.:

Two of my favorite examples from this quarter — Clothing company Shinesty used Facebook and Instagram ads to reach 18-35 year olds. They drove a 14x increase in year over year sales — helping them expand from 2 to 26 employees in just 18 months. And Lighting Etc., a third generation family-owned business in Fort Worth, Texas used Facebook and Instagram ads to target 25-45-year-old homeowners interested in interior design within 35 miles of their showroom. They attribute the 40% increase they’ve seen in revenue this year to their Facebook and Instagram ad campaigns.

Remember several years ago when everyone wondered how Facebook would make money? Yeah, neither do we. According to yesterday’s numbers, Facebook is stronger than ever. And maybe most importantly, it’s still as forward-thinking as ever.

 

Blog post by Bradley Hearn, content marketing strategist at ChannelAdvisor