Facebook faces difficulties monetizing mobile

By Chantal Tode

September 27, 2011

Facebook does not currently deliver advertising to mobile users

The relatively small role played by mobile at the recent Facebook developer conference points to the company’s difficulties in figuring out how to monetize mobile.

The f8 conference for Facebook developers that was held last week produced some interesting developments, such as Timeline, a new feature that reimagines the Facebook profile in a more visual way. However, with the convergence of social and mobile a hot topic, some had expected Facebook to announce the rumored HTML5 platform or an iPad app.

“Facebook doesn’t have a very good story to tell about mobile,” said Aapo Markkanen, London-based senior analyst for consumer mobility at ABI Research

“It’s true that more and more of its users are accessing it from mobile phones, but at the same time Facebook hasn’t really figured out how to monetize them,” he said.

Incomplete strategy
Mobile is certainly a focus for Facebook, with reports suggesting that Facebook has dedicated a big team and lots of intellectual capital against a mobile strategy.

The company acquired feature phone app maker Snaptu earlier this year and launched Facebook Messenger, a free messaging apps that could take a bit out of carrier's text messaging revenues.

Facebook also said at the developer conference last week that it will enable apps, including mobile apps, to automatically send data to Facebook’s activity feed. Timeline and other features will also be available via mobile.

However, a lack of ads or third-party apps on Facebook’s mobile versions is evidence that the company’s mobile strategy is not complete, per Mr. Markkanen.

The company also recently retreated from the daily deals space, shutting down Facebook Deals after a four-month trial in several markets.

With over 350 million users accessing Facebook via mobile, it is clear that mobile plays a fundamental role in social. And, that Facebook needs to take action in this quickly evolving space.

“With social users migrating rapidly to mobile devices, Facebook is under pressure to deliver a compelling mobile experience that uniquely leverages the platform -- it can’t wait too long,” said Jed Williams, analyst and program director at BIA/Kelsey, Chantilly, VA.

“The fact that mobile didn’t play a more prominent role at f8 isn’t so much a commentary on how Facebook values the platform, but instead an indication that its strategy for a full-scale mobile platform hasn’t fully congealed,” he said.

“The question at this time is not whether or not mobile is being neglected, but what path Facebook ultimately chooses.”

The industry is keeping a close on Facebook – simply because it has such a big mobile user base – to see if it will create its own HTML5 operating system.

By building its own HTML5-based applications, this would give Facebook more control over rules and pricing than if it operates within Apple’s native app universe.

“With 350 million – and growing – mobile users, Facebook enjoys ample leverage in the mobile strategy that it ultimately employs…whether that strategy is app or mobile-Web based,” Mr. Williams said.

“It is testing any number of ideas on the desktop – movies, “activity ads”, formerly deals – to gain traction for Credits, its social currency,” he said.  “We expect its mobile strategy to reflect, and amplify, this push.

“As a result, the HTML 5-centric, browser-based approach makes sense so that Facebook can control payment terms without working through a toll collector – Apple.”

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York

Comments on "Facebook faces difficulties monetizing mobile"

1. Ron Cal says:

   November 10, 2011 at 1:04am

   The intersection of events and photos provides a perfect opportunity for branding mobile user generated content.

2. Joe Ariganello says:

   September 28, 2011 at 12:17pm

   Over 200 Million users access Facebook on their mobile phones, yet the experience is still far from optimal. Facebook has the opportunity to integrate and capitalize on it's most addicting online features, including games, yet has yet to cash in. Considering 53% of users play games, there's still room to entice users to make the jump to mobile, which would not only increase their daily usage but allow Facebook to integrate targeted mobile marketing campaigns.