The third fiscal quarter for Facebook Inc(NASDAQ:FB), this year, finally gave positive results, with increased revenue, after a tumultuous period of unsure speculation. The transition from desktop users to mobile users took a toll on the site, but Facebook started introducing the “sponsored stories” and the third quarter did show the results which it yielded. The site has reported a growth in revenue through the mobile advertisements. However, the revenue through the desktop adverts has gone down in the third quarter.
While mobile advertisements yielded $152 million in terms of revenue, the revenue brought about through desktop ads were, by calculation, $933 million. Apart from the shrink in revenue during the first quarter, never has desktop ad revenue for the site shown such a contraction from the larger figures. The desktop ad revenue went down from the last quarter by one percent or so, but it definitely has decreased since before. The revenue shift towards the mobile advertisements, however, has been very pronounced.
The fear now is, though, that Facebook will start earning less gradually. This is because the mobile ads are less expensive than the desktop ads, and the advertisers and clients are not willing to pay more than a certain amount for the mobile ad displays. Therefore, if the numbers start shifting towards mobile ads, then the site will start earning less, because of the decline of the desktop ad revenue. Despite the successful task of trying to earn from mobile advertisements, the site will be facing long term problems.
Facebook has become the grounds of experimentation for advertisers and marketers. The field is lucrative, in the sense that there is potential for the site to yield good money, but everything is a little sketchy right now. The site, unlike Google, tends to focus on the average revenue per user, or the ARPU. Google, however, focuses on the cost per click, or CPC, so the exact CPC of Facebook’s advertisements through the mediums of the desktop and the smartphones are not known. If the desktop ads keep receding, then the profitability of the clicks they receive will also go down.