Can Facebook?s mobile ad network compete with Google and Apple?
Facebook is looking to leverage its rich user data to help brands deliver targeted mobile advertising in applications and mobile sites other than its own via a new mobile ad network.
While the social network has significant biographical and social data that can be used to target ads in iOS and Android apps, its efforts to date in monetizing mobile have struggled. Facebook also faces significant competition, with numerous mobile ad networks already competing for mobile ad dollars.
?There are already many large mobile ad networks with long track records of success driving results for advertisers,? said Dave Martin, senior vice president of media at Ignited, El Segundo, CA.
?That said, there is an opportunity here for Facebook to finally offer competitive ad products with superior targeting and reach,? he said.
?If their offering lives up to its potential, they?ll quickly become competitive with Google and Apple.?
The data advantage
Brands and agencies are always looking for new ways to deliver ads with greater relevance.
As such, Facebook?s mobile ad network, which is currently being tested, may be attractive to advertisers because of the potential to access the rich amount of data Facebook has about its users.
?Facebook has a big advantage when it comes to data,? Mr. Martin said. ?They own more valuable data on more consumers than any other network by far.
?It will be worth it for a lot of advertisers who rely on data for targeting their digital and mobile ads to test the new network,? he said.
The new mobile advertising strategy reflects the first big move by a social network into the ad network space.
This is significant because social data can offer fresh insight into consumer behavior that can help drive results for mobile advertisers.
?Facebook brings social behavior to the table, with visibility into customers behaviors and affinity like never before,? said Nathaniel Perez, Miami-based global head of social experience for SapientNitro. ?No other network has such deep insight into our likelihood to engage with an ad.
?Due to very difficult access to aggregate social data, the social targeting space is still in its infancy,? he said.
?While a few players have managed to develop techniques that blend Twitter-based data with ad targeting for higher relevance, the social ad space hasn't seen any big move from big players until now.?
Survival of the fittest
The mobile ad network is one of several ways that Facebook is looking to make money from mobile advertising.
However, unlike some of the efforts announced to date, the mobile ad network will not directly impact the Facebook user experience on mobile.
While there are significant opportunities for Facebook in the ad network space, it also faces several challenges.
One of Facebook?s challenges here will be how well it is actually able to expose rich social behaviors to advertisers, a code it still does not seem to have cracked so far, per Mr. Perez.
Additionally, while Facebook has the ability to use its data to identify the right person to receive an ad, it is not clear if it will be able to help marketers activate mobile with strong creative or to provide quality ad environments.
?The challenge will be Facebook's ability to help marketers activate in mobile with the right creative,? said Jim Selden, senior vice president of marketing for Crisp Media, New York. ?How will they approach that essential component?
?Many mobile advertisers are just getting started and look to networks to provide guidance and creative support,? he said.
?The other challenge will be providing marketers with a network that provides quality ad environments that are contextually relevant, with the scale required to match their huge base of users.?
Facebook also faces considerable competition as the mobile space grows quickly and numerous companies look to leverage the growth.
The fierce competition suggests that only the ad networks that can differentiate themselves will survive.
?Facebook could easily become one of the survivors based on the large volume of high quality data that they collect every day on their enormous user base,? Ignited?s Mr. Martin said.
?We do expect programmatic (automated) buying to play a bigger role on mobile in the future as well,? he said. ?Facebook and Google have advantages here as both have already built successful and profitable programmatic media buying platforms.?
Chantal Tode is associate editor on Mobile Marketer, New York