Facebook's steely revenue march is fueled by mobile ads: 62% of Facebook's Q2 2014 advertising revenue came from mobile ads, up from 41% just a year ago. This ad revenue may still just be a paper castle waiting to fall — my colleage Nate Elliott's analysis that Facebook is still failing marketers suggests that. But right now over a billion people around the world — 81% of its entire member base — access Facebook on mobile devices every month, twice as many as did just two years ago (see Figure 1). And they are seeing ads.

Source: Facebook

I see three important conclusions stemming from Facebook's results:

  1. The mobile mind shift is hitting critical mass around the world. People increasingly engage with people, information, and services on their mobile devices first. Forrester forecasts that 2.4 billion will have smartphones by 2017, twice the number as in 2012. So if your customer isn't mobile today, they will be soon — across every generation. Firms must serve their increasingly impatient mobile customers with great mobile experiences. It's what our book, The Mobile Mind Shift, is about. Facebook is both driving and benefiting from the mobile mind shift as it delivers ever-more services on the devices people crave.
  2. Digital experiences are mobile experiences first and foremost. Eighty-one percent of Facebook's members are monthly mobile users. And 78% of its daily users are daily mobile users. When Facebook did an about face and added a Facebook app (not just a mobile Facebook web site), it paid off in engagement. According to Flurry (recently acquired by Yahoo!), in April 2014 17% of all mobile app time was spent in Facebook's app. Wow! Any company serving customers online must serve them on mobile. And apps are better than Web for engagement and quality of the experience. Facebook has proven this with the steady growth in mobile ad revenue stemming from its app.
  3. Mark Zuckerberg's bet on deconstructing Facebook into separate apps to focus on more mobile moments is spot on. If the basic app generates these results, just think of what a billion people using other Facebook features on mobile devices could do. My colleague and coauthor Josh Bernoff has commented on this. Facebook will diversify its mobile app portfolio to compete for all the mobile moments in its grasp: mobile messaging moments, mobile photo sharing moments, mobile news feed moments, even mobile search moments. I wonder, though, whether Facebook as a brand umbrella will work across these diverse applications . . .

Facebook's financial results are a bellweather indicator of the mobile mind shift. If it's true for the 1.3 billion Facebook members, it will be true for many or most of your customers and employees.

As an aside, Facebook come a long way since 2006 when I met with a young Facebook employee carrying the exalted title "chief revenue officer." The company had $0 revenue at the time. We talked about an ad-support business model back then, but he was worried about ads as their sole model. (I pushed him hard to avoid subscriptions.) Not any longer. Ads, and now mobile ads, are Facebook's destiny. At some point soon, Facebook's future will hinge on whether it can monetize even more mobile moments through ads.