Will self-serve ads help Facebook open mobile revenue floodgates?
By Chantal Tode
June 7, 2012
Facebook is testing non-social Page posts in News Feeds
In a significant move forward for its mobile strategy, Facebook is giving marketers a way to reach a mobile-only audience for the first time with sponsored stories.
Previously, sponsored stories appearing in mobile news feeds – which became available for the first time earlier this year – had to be purchased as part of an ad package. Now marketers can purchase mobile-sponsored stories independently of other forms of advertising, a move that should help the social network giant better monetize its mobile audience.
“With this move, Facebook is now offering self-service, so essentially anyone can set-up and run a campaign,” said Ed Chater, media operations director at mobile marketing agency Somo, London. “This is perfect for small- and medium-sized businesses, which perhaps don’t have or need a specialist sales rep at Facebook.
“It is also good news for big brands, giving them and their mobile agency more control over campaigns to see what is and isn’t working, so should therefore help to generate a better ROI,” he said.
“Advertisers big and small can now segment between desktop and mobile and optimize to each platform. This will help brands that haven’t got a mobile offering at present be more intelligent about where they spend their money and test to see what works.”
Opportunities for marketers
One of the opportunities mobile-only sponsored stories opens up for Facebook is with smartphone app developers who are looking to drive installs. These marketers will now be able to target potential users when they are on their phones and provide a link that takes them directly to an app store to download the app.
The strategy could also be attractive to local businesses looking to reach on-the-go consumers.
Big brands will also be able to more easily test mobile-only campaigns as a result.
Facebook is upping its mobile game
“The key revenue challenge for Facebook has been less opportunity to monetize on mobile and they have regularly been criticized for revenue slowing despite increased global smartphone adoption,” Mr. Chater said.
“This improved targeting will lead to more advertising on mobile and therefore more opportunity for Facebook to generate revenue from users,” he said.
“It is just the next small step in what we know will be many more iterations of Facebook’s mobile strategy as they learn what works; from just running on mobile, to now being able to target, we’re keen to see what’s next.”
The move will not only broaden Facebook’s appeal with marketers but it could also be a significant step toward boosting the social network’s reputation with investors.
Facebook’s image has taken several hits over the past month in the run up to its initial public offering and in the weeks immediately following as the social network’s share value dropped.
As the IPO approached, investors became increasingly more concerned about Facebook’s long-term revenue-generating potential, not in small part because of Facebook’s inability to date to monetize mobile effectively.
The problem has been that while Facebook derives most of its revenue from desktop advertising, use is increasingly migrating to mobile, which the social network has not been able to monetize at near the same level.
There has been other bad news with a recent survey from Reuters/Ipsos finding that four out of five Facebook users have not made a purchase as a result of advertising or comments on the site.
However, despite Facebook’s challenges, it still has a massive audience with 500 million users regularly accessing the site via mobile.
By giving marketers a way to leverage that audience, Facebook is potentially opening up significant money-generating opportunities. The challenge for marketers will be in finding the best ways to use Facebook to reach mobile consumers.
“Facebook is still competing on a mass scale – it is the number one mobile destination and so has the biggest scale and reach for advertisers,” Mr. Chater said. “Offering increasingly powerful and as yet unrivalled targeting opportunities sets it even further apart.
“The challenge for a brand campaign of this kind is making sure you are making the best of the Facebook ecosystem,” he said. “This means creating an integrated Facebook strategy, linking up your page, your app and your call to action, all without making the user step outside.
“This is even more important on mobile given the context that people use their phones in. They are goal orientated, want even less distraction, so you’ve got to make their journey smooth, simple and worth it.”
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