Facebook Warns: Mobile Ads Are A Double-Edged Sword For Us

Facebook Facebook CEO Mark Zuckerberg

Facebook admits in its annual report that its mobile app is underutilized as a source of revenue because it serves fewer ads on mobile than it does on its traditional desktop platform.

However, what Facebook loses in volume it makes up in margin, the report says. "The lower volume of ads per mobile user is partially offset by the higher price per ad for mobile, and we are investing to try to make our mobile ads more valuable over time," the company wrote in advice to investors.

That suggests mobile ad prices should go up over time.

Facebook also disclosed that its total revenue for 2012 was $5.089 billion, an increase of 37% over 2011.

Here's the full text of Facebook's mobile ad commentary:

Facebook Usage on Mobile Devices. Increasing Facebook use on mobile devices may affect our revenue and financial results as we currently show fewer ads on average to mobile users compared to users on personal computers. The lower volume of ads per mobile user is partially offset by the higher price per ad for mobile, and we are investing to try to make our mobile ads more valuable over time.

In 2012, we began showing ads in mobile users' News Feeds, and for the fourth quarter of 2012 and for the year ended December 31, 2012, we estimate that approximately 23% and 11% of our ads revenue came from mobile products, respectively.

We expect mobile usage to increase at a faster rate than usage through personal computers for the foreseeable future, particularly in developed markets, and our success in ramping up mobile monetization will likely have a material impact on our financial performance.