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01
Nov
2013

Facebook powers on with mobile advertising

POSTED BY Analyst Team
Not so many years ago – well, five, actually - brands were extremely dubious about mobile advertising. It was intrusive; the screens were small; there was no inventory; no-one else was doing it; most of what was out there was spam; and so on. It was around about this time that Mark Zuckerburg’s social network was hitting the 100 million user mark, and a few people were thinking, “Hmm. We might be able to make some money out of this kind of thing.” Around 18 months ago, the two collided. Following Facebook’s IPO, it was decided that, since by now nearly 500 million people were using the network on their mobiles, it mightn’t be a bad idea to try and monetise them in some way: hence Facebook finally introduced advertising for mobile devices. Within 18 months, mobile’s contribution to the advertising revenues of Facebook – the most successful social network the world has thus far experienced – had risen from, well, nought, to a quite remarkable 49%; or, to more than $880 million in the past three months alone. It is perfectly possible that the company will realise $3 billion in mobile advertising in the calendar year. While it still lags well behind Google (which has never disclosed mobile’s contribution to its revenue stream, but which is believed to be pulling in around $6 billion from mobile), the gap has closed dramatically in recent months. Furthermore, with these two players alone pulling in around $9 billion this year from mobile advertising, and with several players in Japan and China also each generating several hundred million dollars, global adspend on mobile this year is expected to exceed $13 billion, as our recent report on the topic indicates. For several years now, advertising on mobile has grown faster than on any other medium. With spend increasingly focus on below the line (engagement) rather than purely above the line (reach), that trend is likely to continue for the foreseeable future.