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Sponsored Stories enters the $1M (a day) club

Facebook reports positive revenue for its Q2 earnings report, new advertising products show strength

Technology trends and news by Krystal Peak
July 26, 2012
Short URL: http://vator.tv/n/28b5

Scrutiny abounds when it comes to the latest numbers released by Facebook for its first-ever quarterly earnings report. While the company did come in line with many expectations, the revenue from advertising came in at $992 million, exceeding many expectations. Advertising revenue makes up 84% of all revenue. 

Of the several advertising products that marketers can purchase, Facebook pointed to the new Sponsored Stories ads, which still hasn't rolled out worldwide, as the growing champion of the company. With just a few months under its belt, Sponsored Stories have grown to generate $1 million a day, around half of which is on mobile. 

“Sponsored stories and newsfeed are the cornerstone of our mobile monetization strategy,” chief operating officer Sheryl Sandberg said, on the earnings call.

Sponsored Stories, are status updates that double as advertisements -- like when your friend checks into a restaurant and that company wants all your friends to see that check-in to float to the top of your news feed

As Facebook presses forward into Q3, it plans to continue to rollout Sponsored Stories in News Feed to see just how much more growth can come out it.

David Ebersman, company COO, pointed out that  "ad impressions continued the recent trend of growing more slowly than users as more of our usage is on mobile devices . . . especially in the U.S. where smartphone use is expanding rapidly.”

This is a promising report but not necessarily for this quarter, because (currently) mobile delivers far fewer ad than the Web platform. 

With several products, pricing scales and areas to target, many people have mentioned that it isn;t the easiest to advertise on Facebook, like they do on Google.

Facebook CFO, Sheryl Sandberg also pointed out that some advertisers, brands and marketers have experienced challenges in converting their content for the Facebook platform. Sandberg stated that Facebook is a "challenge" because it is not TV or search where many are familiar with presenting content.

Using the flash sales site Fab, as an example of how the shopping experience has changed thanks to social outlets, Sandberg pointed out how we all need to evolve with the interest of the community and it is a learning process and the company will do what it can but the clients should also realize that Facebook is a different animal.

This information was a silver-lining since Facebook narrowly beat expectations by posting $1.18 billion in revenue for Q2 -- a disappointment which investors followed up by sending the shared to new lows in after-hours trading.


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