Facebook & Mobile Advertising
Last week saw various big players in the mobile space announce their second-quarter results – there were Apple’s device shipments, Zynga’s declining revenues and… Facebook. Facebook is arguably an enigmatic player within the mobile space. The company has frequently been criticised for not having the right formula for its mobile business, and its more direct moves into mobile, such as Facebook Home, have not seen high adoption. However, Facebook’s mobile advertising business, dare I say, looks promising. Q2 2013 saw Facebook’s mobile advertising business generate 41% of the platform’s overall advertising revenue, which stood at $1.6 billion. To put that figure into perspective, Facebook’s Q1 2013 results saw 30% of the $1.25 billion advertising revenue generated from mobile. This strong quarter-on-quarter growth obviously impressed some, as Facebook’s Nasdaq share price has risen to $34.01 at the time of writing, bringing it near to the $38 per share it stood at during Facebook’s IPO last May. Mobile advertising on Facebook is a tricky business – on the one hand, users may consider mobile adverts, which take up a large proportion of their screen, as intrusive, yet Facebook announced in their earnings Q & A that only 5% of the News Feed is ads, which varies by region and person. In this earnings release, Facebook CFO David Ebersman also announced that 20 billion minutes a day are spend on Facebook – that’s 20 billion potential minutes for eyeballs in the advertiser’s view. Several users have complained of how often they see adverts which they believe are irrelevant to them, and, to add insult to injury how often they accidently click on them, given the ‘fat finger’ problem. In an effort to improve their advertisers’ experiences though, Facebook updated its Ads Manager Reports in June 2013, to improve how the data is viewed. Facebook now has, arguably, two opportunities with regards to mobile advertising: Firstly, video ads, which Facebook COO Sheryl Sandberg said they were “exploring how we can expand” in the earnings call. Some have speculated that this could be in the form of auto-roll ads, similar to the auto-play videos which now exist on Instagram. This brings me neatly onto option number two – advertising on Instagram, which CEO Mark Zuckerberg implied would probably be monetised in that way, however he declined to be more specific. Without a doubt this is an exciting time for the mobile advertising industry, as mobile players such as Pinterest and Snapchat, who currently don’t monetise their audience through advertising, could experiment with the medium. Furthermore, Twitter, which has continued to make moves into the social TV space could further develop, as the opportunities for user’s to view adverts on both their TV and mobile device is a prospect many advertisers are enthusiastic about. And will mobile advertising giant Google, which currently doesn’t show adverts in its Google+ feed, change its direction as a result of these announcements?