On Wednesday, Facebook reported that nearly 75% of its advertising revenue came from mobile devices in the first quarter of this year.
The New York Times reports that most of Facebook’s 1.44 billion users access the social networking company’s services on a mobile device. Of those users, 1.25 billion or 87% accessed them on a smartphone or tablet at least once a month — a 24% increase from last year.
Smartphone and mobile app use is growing dramatically around the world. Smartphone users are growing at an annual rate of 42%.
And rather than focusing on text, Facebook is shifting its resources toward video. Users view four billion videos a day, or four per person (Facebook defines a “view” as a video playing for at least three seconds).
“More than any other company right now, they are the single biggest beneficiary of this shift to video and mobile,” said Mark Mahaney, an Internet analyst with RBC Capital Markets. “This growth is going to be more sustainable than people realize.”
The growth of Facebook’s ad revenue is critically important to the company, considering it makes nearly all of its money from advertising. Interestingly, Facebook limits the amount of advertising on its social network and on one of its apps, Instagram. Facebook’s other apps, Messenger and WhatsApp, do not feature ads.
“They have advertisers pounding at the doors to get their customers,” said Ben Schachter, an analyst with Macquarie Securities.
Mark Zuckerberg, Facebook’s co-founder and CEO, told investors on Wednesday that Facebook intends to improve the advertising on its services, not increase it. “The primary goal is to increase the quality. That’s our strategy for growing the business,” he said.
According to the Washington Post, Zuckerberg also introduced Hello, a voice-calling app for Android users that is meant to replace the voice dialing apps already built into smartphones.
“We’re really pleased with the growth, which is across all of our verticals,” said Sheryl K. Sandberg, Facebook’s COO.
Facebook is second only to Google as the world’s largest competitor in the digital advertising market. Last year, Facebook had 7.0% of the $145 billion global digital advertising market. Google had 31.4%.
Zuckerberg claims that his company will start to focus more on Internet phone calls and messaging services. “What we’re focused on doing is providing more higher-quality services for free than what you could otherwise get in paying for them,” he said.