After filing for an initial public offering (IPO) earlier this month, Facebook is looking to generate more revenue from its mobile audience, which comprises nearly half of their traffic. According to the Financial Times, Facebook plans to start displaying ads in their mobile app and the mobile version of their web site by early March. The Facebook IPO filing states that the company isn’t making any “meaningful revenue” from mobile, but it seems that this is about to change.
The First Round of Mobile Ads
Facebook’s IPO filing hinted that it is considering rolling out mobile Sponsored Stories, which launched in 2011 on the desktop version of the site. These are ads that use your friends’ likes, check-ins, and comments to determine what ads to display for you. From the IPO filing (emphasis mine):
Mobile Advertising. The global mobile advertising market was $1.5 billion in 2010 and is expected to grow at a 64% compound annual rate to $17.6 billion in 2015 according to an industry source. According to a third-party report published in September 2010, the Facebook app is the most frequently downloaded app across all major smartphone platforms in the United States. We had more than 425 million MAUs who used Facebook mobile products in December 2011. We currently do not show ads or directly generate any meaningful revenue from users accessing Facebook through our mobile products, but we believe that we may have potential future monetization opportunities such as the inclusion of sponsored stories in users’ mobile News Feeds.
Pitchfork Time?
If you ask anyone, they will say they hate ads. But they are obviously effective or companies wouldn’t make them. Android users are actually quite used to seeing ads in many of the apps we download every day. Sometimes they are obtrusive and annoying, and sometimes we learn to just ignore them. I know I’ve been guilty of getting the ad-supported version of an app just to save a few bucks.
But it all depends on how Facebook decides to implement these ads. On the desktop version of Facebook, sponsored stories currently live in the right column, but will be migrating to your news feeds soon. This means they will be mixed in with the rest of your new items, making them a bit harder to ignore. Moreover, you can’t opt out, at least not at this time. We have yet to see how they will be implemented for mobile, but it stands to reason it will mirror the desktop version and be mixed into your regular news feed.
Paranoid, tin-foil hat-wearing folks will immediately cry foul and want to sue or start a petition. Or more ironically create a Facebook page called “We are the 99%! Stop FB Ads Now!” or something catchy like that.
Personally, I’m more of a wait-and-see kind of guy. Ads are here to stay. They are the cornerstone of capitalism. And I’d much rather see ads that are more targeted to me and my likes than random, generic ads I couldn’t care less about. So if Facebook does this right, everybody wins. So let’s keep those pitchforks in the shed for now, and put the torches down until we see more.
The Future
Smartphones are already starting to outsell desktop computers, so there is no question that Facebook will be trying multiple methods to monetize their mobile offerings. So we can look forward to more than just sponsored stories. After all, once Facebook becomes public, they have to answer to stockholders, and that means pulling out all the stops to remain competitive and make money.
source: Financial Times
via: PCWorld