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Here is Why Facebook Inc (FB) is Killing it Today

Facebook Inc (FB)Facebook Inc (NASDAQ:FB) impressed Wall Street with its third quarter earnings release after the closing bell yesterday, and while we all know that the site’s user base eclipsed one billion earlier this year, investors were delighted to discover that advertising revenue growth had actually sped up from the previous quarter quite significantly. We’ve already covered the financial talking pointsin addition to showing you which hedge funds made millions on Facebook Inc (NASDAQ:FB)’s gargantuan gain in after hours trading yesterday, but there’s also a little known study making its way around the web today.

Coming from Adobe Systems‘s “Q3 2012 Global Digital Advertising Update,” it has been reported that brand engagement on Facebook Inc (NASDAQ:FB) has been off the charts recently. Here’s an excerpt from the study:

Brands continued to invest in Facebook Inc (NASDAQ:FB) to drive fan growth, and Facebook continued to show significant increases in engagement. Engagement, which is defined as likes, comments, and shares, grew 896% YOY, as shown in Figure 9 [below]. We surmise that increased engagement rates result from platform changes (Timeline) made in the last three quarters, use of new acquisition and engagement metrics, and more effective social marketing by brands. Increases in engagement levels in future quarters would indicate that Facebook Inc (NASDAQ:FB) is becoming a more valuable advertising marketing channel than in the past.

Additionally, here are a few graphs that tell the story quite nicely:

Adobe Systems

Mobile user engagement at Facebook Inc (NASDAQ:FB) is up significantly, as seen here:

Adobe Systems

So, these numbers can give some background as to why Facebook Inc (NASDAQ:FB) has seen its advertising revenues accelerate. As user engagement has increased, the social network has become a more attractive medium for advertisers to reach consumers, and while most of Facebook’s users complain about Timeline, it may be most responsible. Likewise, it is extremely encouraging to see increased mobile engagement, and due to this trend, it’s easy to see why Facebook Inc (NASDAQ:FB) CEO Mark Zuckerberg was so cheery yesterday.

While Facebook Inc (NASDAQ:FB) bulls undoubtedly want to see the company’s financial metrics remain healthy, it’s also great news to see that much of this growth has come on the back of booming user engagement. For it is the user who will ultimately determine how profitable Facebook Inc (NASDAQ:FB) becomes, and if these statistics are any indication, the future may be even brighter for this stock.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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