Facebook Inc (FB) Revenue Dependent On Highly Engaged Users: Sandberg

Facebook’s chief operating officer, Sheryl Sandberg, said during a talk at Advertising Week NYC, that Facebook Inc (NASDAQ:FB) users are more likely to engage on the social network when they put their real names and are authentic. She pointed out that the launch of a native iOS app in August has boosted user engagement.

Mobile users are 20 percent more likely to return to the website than an average desktop user. And, the increased engagement of mobile users is the key to the company’s mobile monetization program.

Facebook Inc (FB) Revenue Dependent On Highly Engaged Users: Sandberg

Sandberg also said that the recent newsfeed ads have been much more successful. The engagement level of newsfeed ads is 8 times more than the right side rail ads. The company places well-chosen ads in mobile and desktop newsfeeds to avoid degradation in user engagement. But, the recent ad campaigns have ignited privacy concerns.

However, not everything is great about the ad program. The real problem is that of all users who see an ad on Facebook Inc (NASDAQ:FB), only 1 percent click on the link, and even fewer of them make a purchase. Marketers aren’t getting an effective return on their investment. Now, Sandberg is suggesting marketers should measure “overall campaign effectiveness”, instead of measuring clicks.

Morgan Stanley (NYSE:MS), which maintains an overweight rating with a $32 price target, says that Facebook Inc (NASDAQ:FB) is increasingly becoming the center of a number of businesses. It is one of the most important sources of traffic for entertainment, news, and e-commerce websites. It is already a platform for social and mobile gaming. Morgan Stanley (NYSE:MS) says that Facebook has a huge database of self-disclosed information about users, that it can use to place highly targeted ads.

Morgan Stanley (NYSE:MS) worries over Facebook’s mobile ad market, which is still in its infancy. Though Facebook Inc (NASDAQ:FB) is more likely to remain the market leader in mobile advertising, the development of the market itself can take longer than anticipated.

About the Author

Vikas Shukla
Although he has a background in finance and holds an MBA, Vikas Shukla is a technology reporter. He has a strong interest in gadgets, gizmos, and science. He writes regularly on these topics. - He can be contacted by email at vshukla@valuewalk.com