Facebook’s newly released figures for Q4 2017 show that revenue came in well above analyst expectations at $12.97 billion. The consensus projection was that sales revenue would come in at $12.6 billion.
Mobile ad revenue accounted for around 89% of the social media giant’s total ad sales for the quarter.
The number of monthly active users rose 14% to 2.13 billion, which was a slightly lower rate of growth than the previous quarter. The company cemented itself as the world’s second largest ad seller after Google.
The figures were, however, not all positive. The time spent by users on the site has fallen by around 5%, or 50 million hours a day. Mark Zuckerberg noted that changes to the news feed, such as reducing the volume of viral videos, were a major factor in the drop.
News feed changes
In a conference call to investors, Zuckerberg was keen to emphasise that time spent on the site was by itself only a limited tool to judge the value of the network. He also said that he expects short term drops due to changes to in the news feed will make the product stronger overall.
Forbes quotes Zuckerberg as saying:
“By focusing on meaningful interactions, I believe that the time spent on Facebook will be more valuable. If people interact more, it should lead to stronger community. When you care about something, you’re willing to see ads to experience it.”
The figures may a concern, however, as they come before the implementation of the year-long major changes that will look to make interactions between users a priority. There have been concerns of the effect these changes will have on the company’s ability to deliver effective ad opportunities for brands.
“Changes to the algorithm shouldn’t make brands and publishers look to spend less on ads, on the contrary Facebook still gives them the biggest potential reach, as well as the best targeting capabilities for the best performance on every dollar spent,” said Socialbakers CEO Yuval Ben-Itzhak.
“To perform on Facebook in 2018, marketers will need to better understand sub-segments of their audience and target them with more personalised content that will drive engagement. Marketers also need to benchmark their ad spend against their own performance and that of their competitors to make sure that they are spending their budget wisely and only on the best performing content.
“While Facebook has made a lot of changes recently that on the surface look like they make it harder for brands and publishers, in fact this is an opportunity. The brands and publishers that produce engaging content, are smart about their use of different post types and benchmarks and measure their ad spend can only come out winning. Facebook’s audience size can’t be discounted and should rightfully remain a priority platform for marketers.”