Facebook continued to gain ground in the third quarter, catering to the now 1.8 billion people who at least once a month turn to the digital giant to browse, chat and share.
The social media company’s profits shot up 166 percent to $2.4 billion as revenues increased 56 percent to $7 billion for the quarter ended Sept. 30.
When users log on to Facebook, they are increasingly using their phones, with 1.66 billion users accessing the company’s services on a mobile device every month. Mobile advertising accounted for $5.7 billion of the company’s revenues and was 84 percent of total ad revenues, up from 78 percent a year ago.
Mark Zuckerberg, chief executive officer, said: “We had another good quarter. We’re making progress putting video first across our apps and executing our 10-year technology roadmap.”
The company will dig into the quarter more on a conference call.
Facebook is increasingly fending off Google on the advertising (and virtual reality) front and Snapchat as the trendy photo- and video-sharing platform.
Facebook recently came out with a new mobile ad capability that encourages in-store traffic and purchases — while also courting bricks-and-mortar advertisers. The product, called dynamic ads for retail, means Facebook users will see ads that feature products currently available in the store closest to them.
Zuckerberg has been busy, emphasizing live video and video advertising, opening up the company’s Messenger service to bot developers to help push chat-based commerce and drumming up interest for virtual reality with the Facebook-owned Oculus Rift. He said that Messenger now boasts more than 33,000 live bots, and that it would be “meaningful” to advertisers in the future to create News Feed ads that that send customers to Messenger to complete transactions.
“It’s a great channel for people to interact with a business one-on-one and either do transactions in a private space or get support or for businesses to reach out with very personally tailored messages and have an ongoing engagement with a person,” he said. He said that he hoped to enhance that capability on Messenger and What’s App over time.
Instagram, which now boasts at least 500 million users, is leaning on Facebook’s data and ad technology to introduce new ad formats such as carousel ads that include a call-to-action. Facebook chief operating officer Sheryl Sandberg said that there are now 1.5 million business profiles on Instagram, and that is is “pleased” with the adoption of “promoted posts,” which allow businesses to pay to promote Instagram posts to even non-followers.
Next week, the photo- and video-sharing platform will begin allowing brands, including non-advertisers, to tag images with product details and pricing information and link out to the brand’s mobile web site or app to make a purchase. Sandberg said that this was still in a very early testing phase, but that it reflected what the company does in other areas. “What we see is that people in Instagram are using Instagram to browse for products and make those connections, and so we then make the product investments to make those easier,” she said. “We’re watching for what is the organic activity between businesses and consumers and then we’re building products to enhance and enable that organic activity.”
This is also the first earnings release since Instagram introduced Stories, its answer to Snapchat, which allows for disappearing content and encourages more immediate, less perfected, sharing on the platform. Zuckerberg said that already, Stories has more than 100 million daily active users.
Last week, Alphabet-owned Google saw its third-quarter revenues from advertising shoot up 20-plus percent to more than $22 billion in the quarter ending Sept. 30. The parent company posted third-quarter net earnings of $5.1 billion, up from $4 billion, on revenue of $22.45 billion.
By 2017, eMarketer sees Facebook’s annual ad revenue topping $33 billion.