Why Facebook's ad revenue can keep growing: Analysts

Expert: Facebook has a 'secret sauce' and it's very rare
Further upside for Facebook: Mahaney
What's next for Facebook?

Advertising revenue growth played a big part in Facebook's third-quarter earnings beat, and according to some analysts, the social media giant has plenty of runway left when it comes to increasing ad sales.

The earnings results sent Facebook shares 5 percent higher above $109 on Thursday, pushing the company's market capitalization beyond $300 billion for the first time ever.

James Cakmak of Monness, Crespi, Hardt & Co. said Facebook ticks off the three boxes advertising customers care about most: data, audience and the ability to target specific demographics. The company also excels in both "barbells" of new and old advertising, he said on CNBC's "Squawk Box."

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"When you think about the $600 billion ad market, companies are either good at, one, brand advertising — which is your 30-second spot — or direct advertising, which is Google," he said, noting that the social network is going after TV ad dollars with its increased focus on digital video.

"Now here's Facebook's secret sauce: the fact that they can do both. And that's a very rare value proposition."

Since Facebook currently accounts for just 3 percent of the total advertising market, the company can "absolutely" get bigger, Cakmak said.

Advertising revenue — the vast majority of Facebook's sales — jumped 45 percent from the prior year to $4.3 billion in the latest quarter. Mobile ad sales accounted for 78 percent of that, up from 66 percent in the prior year.

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The surging ad sales come at a time when Facebook is also exceeding expectations in user growth, giving it the opportunity to tout a wider audience — and therefore more data — in presentations to customers.

Monthly active users, or MAUs, rose 14 percent from the previous year to 1.55 billion, as of Sept. 30. Mobile MAUs came in at 1.39 billion, and both narrowly beat analysts' expectations, according to StreetAccount.

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Investors should expect user growth rates to eventually hold steady or slow down, but there is plenty of other growth happening at Facebook, including advertising, said Mark Mahaney, technology analyst at RBC.

"It's almost 60 percent in ad revenue growth. That's rare air," he told "Squawk on the Street." "That reminds me of Google back in 2007, 2008, and that's why there is still upside for Facebook stock."

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Acceleration in advertising and user growth drove increases in EBITDA and free cash flow, and that pattern is likely to continue, Axiom Capital Management analyst Victory Anthony said.

Anthony told "Squawk Box" he sees no upstarts poised to threaten Facebook's growth in advertising.

Snapchat — and Twitter, if it "gets its act together" — could siphon some ad dollars, he said, but for the most part, Google and Facebook are likely to consolidate market share in the digital advertising space.

The sheer size and scale of Facebook allows the company to invest heavily in the technology necessary to create the algorithms that underlie its success in targeted advertising, said Mark Hawtin, investment director at asset manager GAM.

"That puts them way ahead of many of the competitors," he told "Squawk Alley."

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Facebook reported third-quarter earnings of 57 cents per share on $4.5 billion in revenue. Wall Street expected the company to deliver quarterly earnings per share of 52 cents on $4.37 billion in revenue, according to consensus estimates from Thomson Reuters.

—CNBC's Jacob Pramuk contributed to this story.