Facebook shifts focus from social in aggressive move to monetize mobile
Hoping to leverage its strength as a mobile application discovery platform, Facebook is stepping away from its social positioning to test a non-social ad unit promoting apps in users? mobile news feeds.
The ad unit is the first non-social ad unit from Facebook that is not triggered by a user?s or a friend?s activity. When a person clicks on one of these ads, if they do not have the app installed they will be sent to the App Store or Google Play to get it.
?The shift directly correlates to the pressure they?re receiving to monetize an audience that is growing exponentially,? said Jennifer Leonard, associate director of media at iProspect, Boston.
?This is an aggressive move in a direction to monetize the platform further, a move away from their core focus of usability,? she said. ?It's a shift to a dual focus of relevance both to their advertisers and their user base.
?It will force Facebook to find the balance between driving revenue and maintaining the integrity of their platform; to integrate ads not driven by social response, can dilute their product.?
Facebook reports that it is increasingly becoming a way for iOS and Android developers to grow their apps, with the social network having sent people to the Apple App Store and Google Play 146 million times in the past 30 days. These interactions happened via clicks in Facebook?s news feed, timeline, bookmarks and App Center.
The new ad unit is being tested with a limited set of beta partners as a way to further drive app downloads for developers.
Facebook will charge a fee every time users click on the ads to download the software from elsewhere and d evelopers will be able to design, launch and monitor their mobile app ad campaign within the Facebook App Dashboard.
The development is the latest sign that Facebook is working hard to try to monetize its mobile business as users increasingly access the social network via mobile phones instead of desktop.
While a focus on a non-social ad unit provides some meaningful benefits for developers ? such as to leverage Facebook?s user data for targeting ? it also has the potential to turn off mobile Facebook users ? an important and quickly growing portion of its user base - if not handled correctly.
?From a revenue and advertising opportunity this is great for both Facebook and app developers,? Ms. Leonard said. ?However, the challenge for Facebook is making sure that they don?t adversely affect the consumer experience with advertising.
?Facebook has to make sure that they provide targeting and ads are only shown to relevant users,? she said. ?Users of Facebook go to the site to learn about what their friends are doing, talk to friends, view photos, etc they do not go to Facebook to look at advertisements.?
Delivering mobile marketing opportunities
Since going public several months ago, Facebook?s stock value has been declining in large part because investors are unsure of the social network?s ability to monetize mobile.
With this in mind, Facebook has been heavily focusing on delivering new marketing opportunities in mobile and apps have been a big part of that focus.
Facebook launched an App Center earlier this year and recently said it would phase out Facebook Credits so developers can use their own in-app virtual currencies and charge subscription fees (see story).
The company also reported some initial mobile results that look promising, with approximately half of the $1 million per day run rate it is seeing for Sponsored Stories coming from mobile.
However, with Facebook?s mobile monthly active users continuing to grow, the urgency to offer a compelling mobile monetization strategy is still there and offering non-social ads could be an important part of that strategy. The social network recently reported that mobile users numbered 543 million at the end of June, an increase of 67 percent year-over-year.
?Non-social ads provide the ability to leverage Facebook?s biographical, device and interest targeting options unlike Sponsored Stories,? Ms. Leonard said. ?This provides the ability to become more targeted and promote applications to friends of users who are currently using the application or have mentioned the application.
?In the eyes of the developers, yes it?s easier for them to gain visibility to new audiences and leverage the number of ?friends playing? which helps to endorse their app, though without visibility to see who of that audience is installing the app, the developer is limited in understanding who their audience is and how to cater to them and provide the ability to qualify the value,? she said.
Chantal Tode is associate editor on Mobile Marketer, New York