Facebook released its 2014 financial results at the end of January, breaking down its advertising performance for the final three months of the year, and summarising the previous 12 months. During the fourth quarter, Facebook made $3.85b from advertising, an increase of 53% over the same period in 2013. Mobile advertising made up 69% of that figure, another increase over the 53% recorded the previous year.
This graph illustrates the rise in the average Facebook ad cost, and the fall in number of ads served
What’s most interesting is that during this time, Facebook served 65% fewer ads than the same time in 2013. It managed this feat of making more money from fewer ads thanks to the average cost rising by 335% during the year. The strategy is controversial. It’s making its ads rare, and scarcity makes them more expensive.
This is illustrated by the amount of money it makes per user. In Q1 2013, the average advertising revenue per person was less than £1.50, but by the end of 2014, Facebook was making more than $2.50, on average, from each user. These numbers apply to ads in general, but Facebook tends to concentrate on inserting them into news feeds, as these are the only ones which show up on a mobile device.
Graph comparing the average revenue Facebook makes per user
Statistics show Facebook is gradually becoming a truly mobile company. During the final three months of 2014, 84% of its daily audience used a smartphone or a tablet to browse the site, contributing to the 69% advertising revenue mentioned above. The company also showed considerable overall growth during 2014. Its total revenue was $12.47b, an impressive 58% increase year-on-year.