Facebook moves towards the mobile advertising dollar

Peter Dinham
Sunday, 18 December 2011 20:55

IT Industry - Market

Reports are suggesting that Facebook is poised to make its first move into the mobile advertising space, possibly by inserting its sponsored stories adverts - which highlight a user's friends' interaction on the social network with various brands - into a user's mobile news feed.

Juniper research says that a report that has emerged from within Facebook that the company is possibly moving into the mobile advertising area was inevitable.

According to Juniper's Dr Windsor Holden, in her blog, the reports of facebook's impending move - which first saw the light of day in a Bloomberg article - and cited 'two people with knowledge of the matter', are 'not, to be perfectly honest, revelatory'.

'Facebook capitalising on mobile advertising was as inevitable as Barcelona winning the Champions League or Ash winning last night's Masterchef: The Professionals. (He was good, wasn't he?),' Holden quips.

'Indeed, what is arguably far more puzzling is that it has taken the company so long to reach this point,' Holden says, adding that one argument is that CEO Mark Zuckerberg is 'reluctant to implement a service which might be perceived as intrusive and thus cause churn away from Facebook.'

'However, the site has undergone various privacy settings revamps in the past which are (a) arguably have far more potential to alienate consumers and (b) despite some fairly well-publicised grumblings from consumers - and occasionally, some placatory tweaks in response from Facebook - the user base has continued to grow steadily.'

On the mobile, Holden says that Facebook now has around 350 million users, including 'vast numbers of just about every demographic imaginable.' Holden writes: 'The sheer scale of this audience, combined with the fact that most of them have happily given out umpteen details about their likes, dislikes, location and relationship status (I am always intrigued by 'It's Complicated') would - if filtered through a reasonably competent advertising platform - enable a brand to deliver highly targeted, highly relevant advertising to a substantial audience, and to measure the response to any such advertising.'

Holden also says that Facebook's current - online - advertising revenues are expected to reach nearly $4 billion this year although, in all fairness she writes, 'the sponsored advertising that runs down the side of my own pages must be classified as 'could do better': it knows - from my likes - that I listen to Bruce Springsteen, Jethro Tull and Fairport Convention, so it bombards me with T-shirt offers for said artists. Ocasionally there are advertisements for Sky TV. There may well be others, but either they are so inobtrusive that I haven't noticed them, or they have been so irrelevant that I haven't given them a second thought.'

Juniper Research says that mobile presents Facebook with a huge opportunity, with players such as O2 having demonstrated that consumers are willing to opt-in to advertising, if they feel they are receiving something in return. 'Indeed, if the advertising is sufficiently personalised, then it can be presented as an opportunity to the end user, by alerting them to products related to their particular interests. It is not, intrinsically, alienating,' Holden adds.

'That said, as numerous other players in the mobile space have found, generating significant revenue streams from advertising can be a long and arduous process. To quote Mr Gregg Wallace, co-host of Masterchef: It doesn't get tougher than this,' Holden concludes.