Do Teens Hold Key to Facebook Mobile Ad Growth?

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Oct. 31 (Bloomberg) -- Bloomberg senior West Coast correspondent Jon Erlichman and Rob Jewell, founder & CEO at Spruce Media, examine third-quarter results for Facebook and the concern that the social media site maybe losing its cool with teens. They speak on Bloomberg Television’s “In The Loop.”

Facebook's earnings?

Isn't this idea that maybe teens and tweens think that facebook is no longer cool?

There is a really concerning idea, right?

It is a concern for some investors.

At the end of the day, what fueled this quarter is advertisers coming to facebook and putting more money to work through facebook.

I think the question ultimately becomes, are those younger teens, the once advertising with facebook?

In addition to that, you have the instagram deal that facebook did that which is kind of a hedge for the storyline that is building.

There are some really impressive numbers in this quarter.

You think about the number of people using facebook on mobile devices.

The numbers there were really big, 45% year-over-year growth.

Additionally, the fact you have 49% of the company's advertising revenue now coming from mobile- related ads.

That was 14% the same time last year.

Part of that is facebook moving its advertisers there, but the other part is facebook advertisers interest in seeing more ads in the newsfeed when you're using facebook on your phone.

Rob, i want to bring you in on some of his points.

I know you just released a report on the state of facebook advertising.

What do you think about what he just said?

Is this a concern companies trying to reach teens and tweens may slow down spending at facebook?

I don't think so.

You saw the teen audience had the highest adoption on facebook of any audience.

So i think there's really nowhere for that to go but down.

The good news as he said was that a lot of these users are coming off facebook to use instagram.

When you combine facebook and instagram together, it is still by far the largest audience -- teen audience that you can get anywhere on mobile apps.

Johnn, what does this mean for the company going forward?

Even does going back to some of the numbers we saw, what i thought was really interesting was the operating margins for this business were significantly higher in this quarter than the last -- at this time last year.

49% versus 42% in the same period last year.

It was a just they are seeing this sort of scale of the business that is starting to benefit them as they go away.

Don't forget, they're spending a monster amount of cash to build the business.

Costs and expenses are high just like revenue.

We see the operating margins improved, they's -- it is on a profitability side.

As far as the instagram play, and i like what you say that it was a hedge, does it seem like teens and tweens for this is the kind of thing they want to share more than text?

Pictures and video seemed to be counting more for that age group.

And i think this gets to the important question now that facebook has said, ok, there isn't stream advertising, room number, mark zuckerberg was hesitant to inundate, if you will, the facebook platform with advertising because he didn't want to lose its cool factor.

Now with all of the advertisement on facebook, the stock story has improved from a but what about the cool factor tied to instagram as you start to implement more advertising?

He once again said they're doing sort of a slow, cautious rollout with that.

It is a delicate balance, i

This text has been automatically generated. It may not be 100% accurate.


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