Facebook Inc (NASDAQ:FB)’s stock went from mid-$69 mark to around $71 mark after they announced the earnings for Q2. That was bound to happen because they just beat their estimates comfortably. Mobile ads revenue just keeps rising every quarter for the company.
Justin Lafferty, editor at Inside Facebook, was on CNBC where he discussed about the revenue from advertising that powered the growth of Facebook Inc (NASDAQ:FB). He said that the revenue from advertising increased due to competition between companies to gain popularity on Facebook. He also said that the company is trying to get people used to the newer model of advertising and video ads are comparatively new for Facebook, so they would go slow.
Lafferty added that Facebook Inc (NASDAQ:FB) would first test the video ad feature with certain users, analyze the way users react to the video ads and identify which user looks at the complete video and which one scroll through it and based on that they will customize the future campaign. The average revenue per user is $6.44 in the US and Canada, while globally, it is $2.24, so Facebook Inc (NASDAQ:FB) has huge potential to monetize the global audience.
“Instead of throwing it at the user, they are kind of testing first and seeing how users react first,” Lafferty said
He said that the FIFA World Cup was a huge event for Facebook Inc (NASDAQ:FB) and it generated a lot of revenue because the clients spent millions of dollars on ad campaigns. This was not just from the United States; the revenue flew in from Europe and Asia too. He said that a lot of money from the advertising during the world cup came from Asia, Europe and Rest of the World which was a huge positive.
Facebook Inc (NASDAQ:FB) returned earnings of $0.42 against an estimated $0.34 which helped the stock to rally.