Facebook Inc (NASDAQ:FB)’s 2014 looks very bright, in the view of analysts at Cantor Fitzgerald. They raised their estimates and target price for the company based on observed ad loads and the mix of video ads. They also reiterated their Buy rating on the company.

facebook video ads

The social network’s shares rose nearly 5% in afternoon trading.

Concerns about Facebook’s ad load overblown

Analysts Youssef Squali, Naved Khan and Kip Paulson noted again in today’s research note that they think Facebook Inc (NASDAQ:FB) has increased its ad load slightly throughout the holiday shopping season. Their checks suggest that engagement on the social network remained strong through October and November, and as a result, they have raised their ad revenue estimates.

They still estimate that Facebook increased its ad load to about 10% during the current quarter compared to 5% in the third quarter of the year. They note that there was a similar spike in the December quarter of last year, but they believe that the increase this year features bigger brands and a bigger mix of video ads, which bring higher payouts for Facebook.

The analysts have raised their overall ad revenue estimate for the current quarter to $2.183 billion, which would be a 64.2% year over year increase. Their previous estimate was $2.106 billion. For mobile, they’re now estimating $1.206 billion in revenue, compared to their previous estimate of $1.165 billion. These increases bring their price target for Facebook from $63 to $65 per share.

Facebook tests new video ads, data shows engagement

Last week Facebook Inc (NASDAQ:FB) said it was beginning limited testing of its auto-play video ads. The social network said some users would start to see these ads for the upcoming movie Divergent. The Cantor Fitzgerald team sees these new auto-play ads as a positive for the company, calling them “targeted, relevant and non-intrusive.” They believe advertisers will like these new ads.

The analysts also examined the latest data from comScore, which shows that engagement on Facebook was higher. The social network saw a 5.2% month over month increase on time spent on all mobile devices. Engagement rose to 199.7 minutes, which is a 3.4% month over month increase on a per-visitor basis. Smartphone usage rose 46.4% year over year to 85.9 billion minutes, which is a 39.5% year over year rate per visitor.

How Facebook stacks up to competitors

They also note that Facebook Inc (NASDAQ:FB)’s numbers are in sharp contrast to competitors which actually saw declines in engagement during the quarter. Google Inc (NASDAQ:GOOG) saw a 1.8% decline month over month, while Yahoo! Inc. (NASDAQ:YHOO)’s decline was nearly 11%. AOL, Inc. (NYSE:AOL)’s decline was 11.8% month over month, while LinkedIn Corp (NYSE:LNKD)’s month over month decline was 22.5%. Twitter Inc (NYSE:TWTR) was the only major social network other than Facebook to post growth, as it saw 7.3% growth month over month.