Facebook founder Mark Zuckerberg broke out how one of the company’s key new products is doing during the company’s first earnings call today. Sponsored Stories ads, which are advertiser actions (like posting a photo) that appear in the news feed, are getting “early results that are encouraging.”
The product, which has slowly rolled out over the last half- year or so, are on a $1 million a day annual run-rate (so $365 million a year), around half of which is mobile. “Sponsored stories and newsfeed are the cornerstone of our mobile monetization strategy,” chief operating officer Sheryl Sandberg added.
Many have questioned how Facebook would be able to sell ads successfully on mobile, considering that ads on mobile sites and apps tend to do worse than the web — and because Apple and Google have their own ad networks. Because Sponsored Stories run within the news feed across all of its mobile properties, Facebook is still able to show ads to its 543 million mobile monthly users. Early outside studies had also indicated the new format was working well. Facebook has also begun running them across other sites — on Zynga.com, for now.
Still, as chief financial officer David Ebersman said on the call, the company has a lot of work ahead. ”Ad impressions continued the recent trend of growing more slowly than users as more of our usage is on mobile devices,” he explained. “This trend is particularly true in markets such as the U.S. where smartphone use is expanding rapidly.”
CPMs grew by more than 20% overall in part due to this ad format, chief financial officer David Ebersman said on the call. The company brought in $992 million in revenue.