This is a guest post by Bradley on Facebook’s Mobile Ads Strategy. You can read the guidelines for guest posting at our guest posting guidelines page.
Facebook’s Mobile Evolution Also Means Major Change in Social Media Marketing
Soon, Facebook will redefine social media marketing by putting sponsored updates and feeds on its mobile offshoot, possibly setting a trend in mobile ad placements and targeted mobile promotions. To date, no social networking sites have fully optimized their respective mobile versions, and online ad buyers are yet to see the benefits of bringing their sponsored social media content to the growing number of mobile Internet users.
In the film “The Social Network,” CEO founder Mark Zuckerberg opposed advertising-centered model for Facebook so much that he fell asleep during a meeting with a potential client. Throughout the years, Facebook has prudently embraced advertising. But as the mobile Internet population explodes, the world’s leading social networking site finds itself trapped between profit concerns and brand-image retention.
Facebook and Facebook’s Mobile Ads
Facebook getting public would have a big impact on its advertising strategy. It’s unlikely that it will let go of huge ad impressions from 400 million mobile Facebook visitors, which represent more than half of the total Facebook users.
Smartphones and other mobile devices are becoming the preferred means to browse the web. Almost 70% of American phone owners surf the net on their handsets. Even in third-world countries like Brazil, mobile phones are outranking PCs as the preferred means of connecting online.
FB’s Solution: Hybrid Mobile Ads
Similar to Google’s subdued advertising model, Facebook has successfully mixed user activity updates with ads in the form of Sponsored Stories, introduced last year. The mobile version of the site is expected to feature Sponsored Stories this year.
Sponsored Stories are basically updates on user’s activities that involve interactions with advertisers’ Facebook pages like voting, liking a page, using apps, commenting and tagging. These activities will then be displayed as Sponsored Stories to show user activity and promote the branded page as well. These sponsored updates will appear along normal update streams which can be subjected to privacy restrictions or removal.
Facebook is expected to trade publicly this spring, aiming to raise $10 billion from shareholders. It’s no wonder that the company has stressed the role of mobile advertising in its future financial performance. With no mobile ad strategy, Facebook is missing a lot from the $1.45 billion mobile ad industry. This year, total mobile ad spending in the US will balloon to $2.6 billion, predicts eMarketer.
Industrial statistics shows a dramatic shift to mobile communications. Smartphone shipments rose 63% from 2011 to 2012, whereas PC sales only increased 15%. Last year, smartphone makers completed 487.7 million units, whereas the PC industry only delivered 414.6 million. In the fourth quarter of 2011, the figure was 20.2 million for PCs and 58.8 million for smartphones.
Facebook’s Mobile Ads – Different from Twitter
Remember the annoying Quick Bar Twitter used to display sponsored topics on its mobile site? Facebook is unfazed by the dismal failure of Quick Bar.
Unlike plain ads, Sponsored Stories can easily be mistaken for ordinary feeds and updates. Moreover, FB users have full control over Sponsored Stories. The major challenge for Facebook is to increase the click-through rates of future ad banners without consuming too much screen space.
Facebook currently gets 85% of its revenues from ads. Last year, its profit and revenues reached $1 billion and $3.71 billion, respectively.
Facebook hasn’t provided an exact date for the launching of mobile Sponsored Stories, but “Financial Times” reported that it’s probably this March. With overall traffic nearing 1 billion, Facebook’s entry into the mobile advertising will definitely change the market landscape.
Google and iPhone currently dominate the mobile ad market, earning $750 million and $90 million in 2011, respectively. Unlike the two, Facebook has managed to create a profitable advertising business model without spoiling its “cool” image.
With Facebook’s renewed commitment to monetize its mobile offshoot, social media advertisers should be more flexible in adapting to the needs of smartphone users. Facebook expects its mobile traffic to grow faster than its overall monthly traffic.
About the Author:
Bradley Zarich is a tech-savvy blogger and a general manager at a BPO firm. He manages press releases, product review sites, social media blogs and technical write-ups ranging from satellitecommunications to wirelesstechnology .