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27
May
2011

Facebook disinterest in mobile advertising raises eyebrows

POSTED BY Global Administrator
“We are not focused on advertising in the mobile at all.”

Thus spake Facebook, or – to be precise – Fergal Walker, Facebook’s Head of Mobile Partnerships for EMEA and its representative at the Monetising Mobile Conference in London on Wednesday.

Well, now. In an environment where every major advertising network in the world is reporting a healthy – in many cases dramatic – increase in advertising requests and where the proportion of digital adspend allocated to mobile channels is rising steadily for the representative of a leading global brand to announce “We are not focused on advertising in the mobile at all” might cause the odd eyebrow to raise up a notch or two.

Given that the company in question is one which, at that last count, had some 250 million mobile users, and which derives the bulk of its revenues from advertising, it is reasonable to suppose that the eye-brow raising might have occurred in tandem with a few jaws descending and quite possibly the occasional cough and splutter.

Walker had also begun his speech with the rather splendid observation that “we don’t really have any clear answers or positions in this market”, which is refreshingly honest but perhaps somewhat alarming not just for Facebook but for the rest of the industry, particularly those in attendance at the conference who had been hoping for a few tips.

He went on to say that the main focus on Facebook’s strategy at the present time lay in “getting people onto the first step of using the mobile Internet”; essentially, optimizing the user experience and ensuring that basic Facebook features and content were easily and readily accessible, before seeking to monetize that experience through advertising and/or other means such as virtual currency.

The question which springs to mind at this point is given that (a) they already have 250 million users currently informing their friends via mobile that their work assignment is in, or that they have changed their profile picture, or that they like Janis Joplin and 15 other pages, that (b) 70% of the UK’s Facebook users access the site via mobile, and that (c) Facebook now accounts for 50% of UK mobile Internet minutes: what does Facebook regard as the “tipping point”, when adoption has reached a level sufficient to merit the odd advertisement?

There appears to be a combination of factors at work here: a desire to deliver the optimal social networking site allied to a fear that such advertising might damage the Facebook brand and prompt substantial churn away from the site.

Furthermore, while Facebook is positive about technologies such as  NFC  - the “X Men” poster campaign enabled by Proxima allows users to access either a mobile trailer or film Facebook page by using NFC-capable handsets -  the company appears cautious about monetization of the technology. That said, Walker also stated that Nokia has pitched Facebook a campaign that would allow people with NFC handsets to “like” brands or products from a physical location.

But while this acts both as viral marketing and helps to consolidate the relationship between the retailer and the end user, the means by which Facebook itself generates revenue within this partnership is thus far unclear.

Not least, by its own admission, to Facebook itself.