The social network seems like an unstoppable force as its growth continues to turns heads of both investors and marketers alike.
Facebook announced 4Q 2015 numbers recently, many of which broke its own previous records. For example, Facebook’s quarterly profit was more than $1 billion; the company’s value went up 13 percent on that news — driving the total value of Facebook to over $300 billion.
Heavy investments in the social network and other holdings, like Instagram, are finally paying off, too. Fourth quarter 2015 showed that revenue was up 52 percent, to $5.84 billion, from $3.85 billion in the previous quarter. In that time, costs have only increased 21 percent. Investors are thrilled.
Mobile Advertising: Facebook’s Secret to Success?
Facebook has spent the last several years developing a totally unique marketing platform to reach its roughly one billion active daily users, but it wasn’t until relatively recently that they changed focus to really hone in on mobile users.
Those 934 million daily users, as of December 2015, were an untapped source of marketing income. Once Facebook created a platform for businesses to reach those previously unreachable mobile users, ad revenues rocketed upwards.
Ad prices rose 21 percent year over year in the fourth quarter of 2015, largely because of the increasing demand for mobile ad space. Part of that success can be attributed to a harder push for mobile advertising through Instagram, with 98 of the top 100 Facebook marketers also advertising on the image-sharing network.
2016 promises to be an even bigger year for Facebook. In March, Facebook’s Oculus VR Rift virtual reality headsets start shipping and the company appears to be redoubling efforts to monetize their two messaging apps: Messenger and WhatsApp. Between new ventures and stronger financial discipline, there seems to be no place that Facebook won’t be in the near future.
Facebook projects 2016’s capital spending to increase to around $4.5 billion, increasing costs 30 to 40 percent. However, ad revenue should continue to climb as Facebook increases advertising spaces across their properties. It’s too soon to tell how the Oculus VR Rift units will fare in the marketplace, but if Facebook is really on the cutting-edge of consumer-end virtual reality, its value and profits are going nowhere but up.