Facebook's ad business A-OK

Adobe's quarterly social report finds that more people are seeing Facebook ads, which should translate to more profit for the social network and better results for its advertisers.

facebook hq front desk
The front desk inside building 16 at Facebook's Menlo Park campus.

For Facebook, the word for the first three months of 2014 is "more," as the social network delivered more of everything to its paying clients, specifically the things they really care about like clicks, impressions, and revenue, according to a report from Adobe.

Clicks on Facebook ads were up 70 percent year-over-year and 48 percent quarter-over-quarter, while ad impressions also grew 40 percent and 41 percent, respectively, Adobe found in its Social Media Intelligence report published late Monday.

In other words, more ads are going out and more people are seeing them, which should equate to more profit for Facebook and better results for advertisers.

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Adobe

"With Facebook, what we saw is actually surprising," Adobe Principal Analyst Tamara Gaffney told CNET. "We saw that they were up in ad impressions, double-digits, quarter-over-quarter ... and that is against the typical slowdown that we would see."

The slowdown Gaffney speaks of is a usually observed negative seasonal change in spending between the fourth quarter, when budgets for advertising are highest, and the first quarter, which in turn affects impressions and clicks. Facebook's first-quarter results were opposite the expected, Gaffney said. She believes that Facebook's mobile in-app advertising efforts contributed to a significant portion of its gains this past quarter.

For retail sites, Facebook was also an increasingly important source of revenue as referral traffic generated $1.24 per visit, up 2 percent from the previous quarter and 11 percent from the same quarter last year. Other social networks such as Pinterest, Twitter, and Tumblr showed substantial year-over-year growth in revenue per visit, but quarterly declines, meaning they were less desirable platforms outside the hot holiday shopping seasons.

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Adobe

"Facebook's revenue per visit is continuing to grow when everyone else's went down," Gaffney said. "That tells me that the paid media program for Facebook, for retailers, is more of a core to their buy, meaning that even when their budget is smaller, they're still buying on Facebook, whereas they probably stopped buying on some of the other social media networks as much."

The findings prove, at a pivotal juncture in Facebook's push to make more money from mobile products, that not only is Facebook's advertising business still growing, and impressively so, it is far and away the preferred and constant social option for retailers looking to convert referral traffic into revenue.

Adobe's Social Media Intelligence report is based on anonymized, aggregated data gathered from 5,000 clients using its marketing cloud product. The report looked at 260 billion Facebook advertising impressions, 226 billion Facebook post impressions, 17 billion referred visits from social networking sites, and 7 billion brand post interactions such as comments, likes, and shares.

The encouraging report comes ahead of the social network's quarterly check-in with Wall Street. For the first quarter of 2014, analysts are anticipating adjusted earnings per share of 24 cents on $2.35 billion in revenue, which would be good enough for 61 percent growth over the year ago quarter when total revenue was $1.46 billion.

Facebook closed Monday up nearly 4 percent at $61.24 a share. The company likely has Wall Street's attention on the heels of a report that it will soon unleash a mobile advertising network. In late January, Facebook began a small test with partners to show their advertisements in mobile applications other than Facebook. A wider release of the program would spell greater opportunity for Facebook in mobile, which, as of the previous quarter, had already grown to account for 53 percent of its overall ad business.

 

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