Facebook moves towards the mobile advertising dollar

POSTED BY Global Administrator
Reports have emerged from within Facebook that the company is poised to make its first move into the mobile advertising space, possibly by inserting its Sponsored Stories adverts – which highlight a user’s friends interaction with various brands – into a user’s mobile News Feed. The reports, which first saw the light of day in a Bloomberg article and cited “two people with knowledge of the matter”, are not, to be perfectly honest, revelatory:  Facebook capitalising on mobile advertising was as inevitable as Barcelona winning the Champions League or Ash winning last night’s Masterchef: The Professionals. (He was good, wasn’t he?) Indeed, what is arguably far more puzzling is that it has taken the company so long to reach this point. One argument is that CEO Mark Zuckerberg is reluctant to implement a service which might be perceived as intrusive and thus cause churn away from Facebook. However, the site has undergone various privacy settings revamps in the past which are (a) arguably have far more potential to alienate consumers and (b) despite some fairly well-publicised grumblings from consumers – and occasionally, some placatory tweaks in response from Facebook – the user base has continued to grow steadily. On the mobile, the site now has around 350 million users, including vast numbers of just about every demographic imaginable. The sheer scale of this audience, combined with the fact that most of them have happily given out umpteen details about their likes, dislikes, location and relationship status (I am always intrigued by “It’s Complicated”) would – if filtered through a reasonably competent advertising platform – enable a brand to deliver highly targeted, highly relevant advertising to a substantial audience, and to measure the response to any such advertising. Facebook’s current – online – advertising revenues are expected to reach nearly $4 billion this year although, in all fairness, the sponsored advertising that runs down the side of my own pages must be classified as “could do better”: it knows – from my likes – that I listen to Bruce Springsteen, Jethro Tull and Fairport Convention, so it bombards me with T-shirt offers for said artists; occasionally there are advertisements for Sky TV. There may well be others, but either they are so inobtrusive that I haven’t noticed them, or they have been so irrelevant that I haven't given them a second thought. Mobile presents Facebook with a huge opportunity: players such as O2 have demonstrated that consumers are willing to opt-in to advertising, if they feel they are receiving something in return; indeed, if the advertising is sufficiently personalised, then it can be presented as an opportunity to the end user, by alerting them to products related to their particular interests. It is not, intrinsically, alienating. That said, as numerous other players in the mobile space have found, generating significant revenue streams from advertising can be a long and arduous process. To quote Mr Gregg Wallace, co-host of Masterchef: “It doesn’t get tougher than this.”