Facebook reaches advertising milestone as small businesses swell
SAN FRANCISCO — Facebook now has 4 million advertisers, an increase of 33% in the past seven months that's powered by more small businesses trying to reach customers, particularly on their mobile devices.
"The story is basically about the movement to mobile," Facebook's chief operating officer Sheryl Sandberg told USA TODAY.
The sharp increase in the number of advertisers is an impressive milestone that escalates competition with Google, which has traditionally drawn big dollars from small businesses in the lucrative search advertising market.
Facebook advertisers range from household names to mom-and-pop operations, but the growth is coming from small businesses. Facebook is aggressively promoting itself to these firms, providing them with free pages and services to manage their digital presence in hopes of turning them into paid advertisers.
In March, it announced 3 million advertisers, up 50% from 2 million in February 2015. Facebook said it reached 1 million advertisers in June 2013.
"Facebook’s growth to 4 million advertisers is an enormous accomplishment, especially coming so quickly on the heels of its 3 million advertiser milestone," said eMarketer analyst Debra Aho Williamson. "Facebook is an indispensable advertising tool for many advertisers."
Mobile use has accelerated adoption among small businesses, especially overseas, where more than 70% of Facebook advertisers operate. The fastest-growing region is South East Asia, the company said.
"People are spending more time on their phones, more engagement on their phones, doing more things on their phones, and the phones can do more. They can do video, they can do 360 photos.," Sandberg said. "Businesses are really understanding that they need to be where people are, which is on their mobile phone."
Facebook apologizes for inflating video numbers
More than 90% of Facebook’s users are on mobile devices, where Facebook makes most of its advertising revenue. Advertising on mobile devices accounted for 84% of Facebook's $6.2 billion in advertising sales in the second quarter. Revenue from mobile ads rose 80% in that quarter.
Four out of 10 Facebook advertisers have created a Facebook ad on mobile and two in 10 have created video ads, the company said.
Facebook executives Sandberg and Dan Levy declined to comment on Facebook's acknowledgment last week it overstated a key metric — the average time users spend watching videos. The revelation angered advertisers.
Facebook said Monday it should have come clean earlier. "We should have just said in public that we found this error a month ago and made the correction, and not just called our clients and agencies," Facebook's advertising boss Carolyn Everson said on stage at Advertising Week in New York.
Follow USA TODAY senior technology writer Jessica Guynn @jguynn