Over a fourth of the world logs on to Facebook; ad revenue leaps 49 per cent

There was 16 per cent y-o-y (Year over Year) growth in Facebook’s monthly active users (MAUs) to 2.07 billion at the end of September 2017; this means that about 27 per cent of the world’s population logs in to Facebook every month. This ratio varies from about 65 per cent in the U.S. and Canada to 15 per cent in the Asia-Pacific region. Facebook’s monthly active user base remained strong across platforms, including Instagram, WhatsApp, and Messenger. At the end of September 2017, the number of MAUs on Instagram, WhatsApp, and Messenger were 750+ million, 1.3+ billion and 1.5+ billion, respectively.

This has translated into a huge advertising revenue growth. Advertising revenue which Facebook’s primary source of revenue, grew 49 per cent to over $27.6 billion in the first nine months of 2017 driven by growth in mobile ad revenues across geographies. Mobile ad revenues contributed 87 per cent of total advertising revenues, up from 83 per cent in the same period last year. Mobile ad revenues grew due to an increase in both the frequency of ads shown in News Feed as well as the price per ad.

The average price per ad increased 10 per cent and total ad impressions rose 35% in the first nine months of 2017 over the same period last year. Facebook’s management stated in its third-quarter earnings call that video ads are growing, particularly video ads on mobile phones. The company has implemented a host of video ad formats that should help the company grow its share of the online video ad space. This should help drive the next wave of ad revenue growth.

Facebook’s focus on video is supported by surveys done by Ericsson in its latest Mobility Report which says that mobile video traffic is forecast to grow by around 50 percent annually through 2023 to account for 75 percent of all mobile data traffic. Social networking is also expected to grow – increasing by 34 per cent annually over the next 6 years. However, its relative share of traffic will decline from 12 percent in 2017 to around 8 percent in 2023, as a result of the stronger growth of video.