Facebook and mobile: This is just the beginning

Shares of Facebook hit a record high this week after the company posted impressive second-quarter earnings driven primarily by mobile users. Facebook claimed 399 million mobile-only users, nearly doubling the number from the same period one year ago, and its overall mobile user base increased by 251 million to 1.1 billion. Daily active mobile users grew 40 percent to 654 million, and mobile accounted for 62 percent of the $2.6 billion it generated in ad revenue.

Much of that success stems from the app install ads that Facebook pioneered, spurring Google, Twitter and others to follow. And as Inc. pointed out, mobile still accounts for a small fraction of the overall amount of time consumers spend engaging with digital media each day — indicating Facebook can grow ad revenues substantially if it can increase mobile engagement, particularly in markets where the penetration of fixed-line networks isn’t as high as it is in the U.S.

But while app install ads have been an unqualified success, there are a few other areas where Facebook might also emerge as a leader. MediaPost reported this week that the massive social network is improving its device-targeted ad efforts, enabling advertisers to optimize their bids for specific gadgets. Robert Hof at Forbes predicts the mobile video Facebook started testing late last year “could soon become the key driver for ad revenue growth,” perhaps even siphoning dollars from TV ads. And Facebook has the consumer audience and the advertiser base to take a huge lead in the location-based advertising market that has yet to see mass-market traction. Mobile advertising is still a wide-open space where the landscape can change quickly, but there are plenty of reasons to believe Facebook will only build on its success over the next year or two.

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Colin Gibbs

Colin Gibbs

Mobile Curator Gigaom Network

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