Facebook is growing the amount of money it makes per person using its service twice as fast as it’s getting new people to use its service — and it’s getting a lot of new people to use its service.
Not only did Facebook grow its daily audience by 17% year-over-year in the second quarter to number 1.13 billion and its monthly audience by 15% to 1.71 billion people, but it grew the amount of money it makes per user by 38% year-over-year to hit $3.82. And the average amount of money Facebook makes from showing each of those people ads increased at a slightly steeper clip, up 42% year-over-year to $3.71.
In general Facebook’s second-quarter earnings report is an array of increases. The company’s total revenue climbed by 59% year-over-year to hit $6.4 billion. Its ad revenue rose by 63% year-over-year to reach $6.2 billion. And mobile ads accounted for an even bigger share of Facebook’s ad revenue — 84% in Q2 2016 compared to 76% in Q2 2015 — after Facebook’s mobile ad revenue grew by 80% to number somewhere around $5.2 billion (Facebook doesn’t specify how much mobile ad money it made, only its share of total ad revenue).
Facebook’s ad business continues to grow both in terms of how much advertisers are willing to pay for its ads and how many ads it’s able to sell. In the second quarter, Facebook’s average ad price increased by 9% year-over-year and the number of ad impressions it served increased by 49%.
Advertiser demand for Facebook’s ads was “particularly strong” in the second quarter, said Facebook CFO David Wehner during the company’s earnings call on Wednesday. He attributed the price increase to more of Facebook’s ads appearing in the news feed, especially on mobile, which costs more than Facebook’s desktop-only right-rail ads. The ad impressions increase resulted from more people checking Facebook more often as well as Facebook showing more ads per person, he said.
And to round things out, Facebook’s second quarter further reinforced how the company had turned what was once considered its biggest weakness — mobile — into its biggest asset.
- Mobile’s share of monthly users: 92% (88% a year ago)
- Mobile’s share of daily users: 91% (87% a year ago)
- Share of monthly users that are only on mobile: 61% (44% a year ago)