The following month, the company reported that mobile ads delivered about $150 million in revenue. Estimates for fourth- quarter earnings have risen about 11% from the day before the previous period’s results were announced on Oct. 23 to now, according to data compiled by Bloomberg. Estimates for 2013 sales jumped about 6%.
“Our opportunity on mobile is the most misunderstood aspect of Facebook today,” Zuckerberg told analysts during a call on Oct. 23. “Most people underestimate how fundamentally good the trend towards mobile can be for Facebook.”
Mobile ads have taken on added importance for the company as more users wield smartphones and tablets rather than personal computers to check on friends’ newest photos and status updates. In the third quarter, the percentage of users accessing the service through mobile devices rose to about 60% from 47% a year earlier and just 36% the year before that, regulatory filings show.
Facebook led the U.S. mobile display-advertising market in 2012, beating out rival Google Inc., according to projections by EMarketer Inc. Facebook had zero market share in 2011.
Ad prices on mobile are bolstering the company’s revenue, according to Spruce Media, which provides technology to help companies buy ads on Facebook. A key advertising metric, the cost of 1,000 views by users, was $5.21 during the fourth quarter for mobile compared to the average of 38 cents for ads across Facebook. While the mobile ad price was down 10% from the third quarter, the decline was due to Facebook adding more inventory as the service was expanded to more users, said Lucy Jacobs, chief operating officer at Spruce Media.
“Mobile’s had really good performance,” Jacobs said. “Budgets are shifting into mobile.”
Still, Facebook needs to provide more analytics to keep companies interested in mobile advertising. These tools would offer such information as how the ads are affecting sales, she said.
While Facebook has been investing in mobile ads, it’s also boosted ad services in other areas. Last year, it rolled out the Facebook Exchange, which lets advertisers tailor marketing messages to users based on previous browsing histories on the Web.