Facebook’s mobile strategy comes together with new monetization opportunities
By Chantal Tode
June 21, 2012
After a month of bad press focusing on Facebook’s struggling mobile strategy and its stock’s poor performance post an initial public offering, there were several developments this week suggesting that while the social media giant may be down, it certainly is not out.
The news includes data from Nanigans showing that click-through rates for Facebook Sponsored Stories are higher on mobile while the cost per click is lower, which could help attract more marketers to Facebook’s mobile platform. Additionally, the social network said it is eliminating Facebook Credits and allowing developers to use their own in-app currencies as well as offer subscriptions, moves that could help Facebook drive more revenue from its apps business.
"Keeping in mind all new ad formats tend to have high CTRs at the onset and then generally settle over time, these results demonstrate the promise and potential of the Facebook mobile marketing opportunity," said Ric Calvillo, co-founder and CEO of Nanigans, Boston. "We attribute these results to the Facebook mobile ad unit's novelty, social relevancy and saliency.
“Since the ad unit is a Sponsored Story, it has social information inherently built-in — for example, that your friend is playing a new app — which makes the unit more engaging and interesting than standard mobile ads,” he said.
“We also attribute these high CTRs to the large amount of screen real-estate the ads are given in Facebook mobile News Feeds. Your Facebook desktop News Feed, on the other hand, has competing content in the left- and right-hand sidebars."
Over the past month, a lot of reports have suggested that Facebook is facing significant revenue issues as use of the social network migrates from desktop to mobile as the company generates the lion’s share of its revenue from desktop advertising.
In a comparison of Facebook mobile Sponsored Stories to desktop Sponsored Stories and desktop Marketplace Ads, Nanigans founds that the cost per click for mobile Sponsored Stories are on average 45 percent less expensive than desktop Sponsored Stories, with CPCs as low as $0.20 for mobile Sponsored Stories.
Per Nanigans, click-through rates for mobile Sponsored Stories are on average 12 times higher than for desktop, with Nanigans reporting click-through rates around two percent when mobile delivery is combined with interest targeting.
Kixeye will test an offer of exclusive items for $9.95 per month
With over half of Facebook’s 900 million active users accessing the social network via mobile devices, the numbers suggest there is significant opportunity for marketers to reach Facebook users on mobile.
Nanigans, which serves ads on Facebook, recently announced its integration with the social network’s mobile platform, enabling marketers to deliver Sponsored Stories exclusively to Facebook mobile News Feeds. Nanigans customers include Gilt Groupe, Nordstrom's HauteLook and Atari.
Another development that could help Facebook generate more revenue from mobile is the announcement that it is phasing out Facebook Credits. Once expected to become a universal social media currency, Facebook Credits never caught on as expected.
Instead, developers will be able to use their own in-app virtual currencies that are based on local real-world currencies, with Facebook continuing to take a 30 percent cut of any revenue generated.
Facebook said in a post on the company blog about the news that the need for a platform-wide virtual currency has been reduced by the fact that most games have implemented their own virtual currencies.
At the same time, Facebook is enabling app developers to charge subscription fees. This will give app developers a way to establish a recurring revenue stream and offer updated content or premium experiences for a monthly fee.
The social reports that gaming company Kixeye will start testing an offer of exclusive items for $9.95 per month for Backyard Monsters.
The new feature will be available to all Facebook.com and mobile web apps in July.
“By supporting pricing in local currency, we hope to simplify the purchase experience, give you more flexibility, and make it easier to reach a global audience of Facebook users who want a way to pay for your apps and games in their local currency,” said Prashant Fuloria, product management director at Facebook, Menlo Park, CA, in the blog post. “With local pricing, you will be able to set more granular and consistent prices for non-US users and price the same item differently on a market-by-market basis.”
Chantal Tode is associate editor on Mobile Marketer, New York
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