Everything Sheryl Sandberg Said on Advertising During Facebook’s 4Q Earnings Call

Facebook held its fourth-quarter and full-year-2014 earnings call after market close Wednesday, and advertising was a major focus, with the social network reporting a record $3.59 billion in ad revenue for the quarter, 69 percent of which came from mobile

SherylSandberg650Facebook held its fourth-quarter and full-year-2014 earnings call after market close Wednesday, and advertising was obviously a major focus, with the social network reporting a record $3.59 billion in ad revenue for the quarter, 69 percent of which came from mobile.

Chief operating officer Sheryl Sandberg did most of the talking about advertising during the call, and here’s what she had to say:

Sandberg presented an overview during her opening remarks Wednesday:

The fourth quarter was strong across the board, tapping a great year. This is our first quarter with over $3 billion in ad revenue and over $2 billion in mobile ad revenue. Our fourth-quarter ad revenue grew 53 percent year-over-year. Our mobile ad revenue was 69 percent of the total ad revenue and double that of the past year. Our growth is strong across all verticals in marketer segments. We also saw healthy growth around the world, although growth rates outside the U.S. were affected by exchange rates.

We also made progress growing the number of marketers using our ad products. Custom audiences, our suite of proprietary targeting products, has become an essential tool to segment current and potential customers. Conversion tracking away from marketers to measure the impact of their campaigns online is also seeing wider adoption. We’ve made it easier for businesses of all sizes to plan and manage their ad campaigns and for small businesses to use our targeting tools.

Travel company Thomas Cook recently used Facebook in Belgium to reach a broad audience and used custom audiences to send targeted messages to existing customers based on the places they’d expressed interest in. It reached 30 percent of the Belgian population in just one day and achieved a 3.85 times return on investment. Results like these are attracting more marketers of all kinds to our platform.

Finally, we made great progress improving ad relevance and measurements. To do this, we made significant investments in both our core measurement and targeting tools, as well as ad tech.

Earlier in 2014, we introduced ad-buying capabilities based on reach and frequency metrics, which is similar to how brand marketers buy TV ads and, therefore, enables better cross comparison. We improved our Ads Manager product to give better insights into ad campaigns and analyze their impact. In the fall, we relaunched Atlas to help marketers reach real people and measure results across multiple devices. Omnicom is our first global client, and this month we announced a partnership with Havas to further expand globally. We also invested in Audience Network, which helps marketers extend their campaign off of Facebook, and LiveRail, which provides publishers with the video tools to monetize their inventory more efficiently.

Heading into 2015, we’re excited to build on the progress we’ve made with our core ad products, as well as with newer areas like video, Instagram and ad tech. It is still early days in all of these efforts. There is a lot of hard work to do, and we plan to invest aggressively. Our ultimate goal is to be a critical business partner to our clients, providing people-based marketing of scale to build their brands and move their products off shelves.

Over the past few weeks, I have had a chance to meet with many of our largest global clients and agency partners and talked about how we can drive real business results for them, making sure every impression and every dollar they spend improves their bottom line. Our clients are excited by the opportunity to use video on Instagram and ads on and off Facebook to reach the right people with the right message. In turn, as their ads become more relevant, we provide a better experience for the people who use Facebook.

In response to a question from Goldman Sachs analyst Heather Bellini about the conversations with advertisers mentioned by Sandberg during her opening remarks, she elaborated:

It’s a great time for the brand question because over the past few weeks, I’ve spent a lot of time kicking off 2015 with our largest agency partners and largest clients. And I would say that people remain really excited about Facebook, but people are bigger believers because we’ve had an opportunity to do more measurement over the past year. I think there are few things about the Facebook platform that are really exciting for brand marketers. The first is the creativity and storytelling, and certainly, as you mentioned, video is a big part of that because video is a format that marketers have used for a long time to building those connection to brands.