Facebook ad impressions declined in the fourth quarter but ad revenue continues to soar. Posting fourth quarter results today the company said that marketers are effectively paying almost double per ad impression on what they paid last year.
A week before its tenth birthday, the company reported that more than half (53%) of its $2.34 billion ad revenue came via mobile for the first time in the three months to 31 December.
Overall Facebook advertising revenue was up 76% year on year. That rise came despite an 8% fall in impressions created by more people accessing the service primarily through their phones and tablets, where there is no right hand ad column. That means more ads in the News Feed and the company singled out the increase as one of the main revenue drivers.
"The significant increase in average price per ad was driven by the mix shift to more News Feed ads that have much higher engagement and click through rates, increasing the average, effective price per ad impression," Facebook CFO David Ebersman told analysts. While Facebook doesn't break down local revenues, Ebersman said that price rise, up 92% year on year, was similar across all territories.
CEO Mark Zuckerberg said the aim was not just more ads, but more better ads, and that, based on the companies own user surveys, users had started to feel more positive about mobile advertising. He said that approach was working: "Even as the volume of News Feed ads has grown, click through rates have also remained stable."
Zuckerberg said that a lot of new growth was coming from allowing people to create and control content sharing with specific groups of followers, flagging the firm's focus on creating niche groups as well as scale for both users and advertisers.
The company's cost of sales increased significantly as it builds out local teams around the world. Ebersman said those costs were likely to rise again next year.
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