Facebook’s Q3: Looking for the Latest on Mobile Ad Performance


Facebook knocked last quarter’s earnings out of the park. As we approach Facebook’s third-quarter earnings come Wednesday afternoon, can the social giant go two for two?

That hinges, of course, on the high bar the company set for itself in mobile. After nearly a year of little traction in the mobile monetization space, Facebook’s mobile ad revenue leaped to account for 41 percent of the advertising business, a massive jump by any measure. Analysts’ expectations for this quarter are set at an EPS of 19 cents on revenue of $1.91 billion, a 52 percent increase from the same quarter last year.

The single largest question is one Facebook has shed relatively little light on thus far: How is its latest and most novel mobile advertising unit faring?

I’m speaking of the mobile application install ad, a so-called “native” unit that appears within a user’s mobile News Feed and looks similar to other non-ad content. It’s essentially a unit for app developers to buy; if a user clicks on the ad, they’ll be redirected to Apple’s App Store or Google’s Play market to download and install the new application.

Facebook execs have praised the ad unit’s early performance, though in no specific terms thus far: “They’re growing very rapidly,” Facebook CFO David Ebersman said of the ad product, in a call with AllThingsD last quarter. “And we’re enthusiastic, because the app ecosystem is such a fast-growing and dynamic area – developers need effective ways to help people discover what they have built.”

It would be nice if Ebersman or COO Sheryl Sandberg gave some numbers this time around, especially since the company is focusing more attention on them lately. All we’ve heard is positive chatter in the developer space, and continued interest from analysts bullish on Facebook’s mobile prospects.

Aside from that big question, we’ll go in with the usual queries: Can the company continue growing its user base? (Likely yes, but at an increasingly slower rate domestically. International remains key.)

How are its non-advertising revenue streams faring? (Again, likely fine, though gaming and Gifts still pale in comparison to Facebook’s ad business.)

And will it continue to conform to the new conventions of mobile?

We’ll find out in just a few hours.

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