“The future is in mobile.”
I have worked in the online display advertising business for
the last 4 years. Every year, without fail, one of my company’s key goals for
the upcoming year was to better monetize and capitalize on mobile usage and in
turn mobile advertising. With the advent of smartphones, mobile internet usage
has skyrocketed. Many people don’t even own personal PCs anymore and their
mobile phones are their only means of accessing the internet. Facebook has
witnessed this trend in an even more pronounced manner than most companies,
experiencing nearly half of their 900 million plus monthly active users
visiting Facebook through their mobile devices. Facebook, however, like many other
large portals has still not figured out how to capture the maximum revenue
dollars from this continually growing part of their business. Moving forward
mobile advertising should be a big push for Facebook. Their ability to devise a
strategy that keeps both Facebook’s users happy and Facebook’s advertisers
happy in the mobile sphere will directly hinge on Facebook’s ability to
generate future and increased revenues and in turn dictate their success in the
eyes of the street.
http://allthingsd.com/20120702/mobile-first-product-chief-chris-cox-and-facebook-brass-make-the-phone-a-top-priority/
2 comments:
I agree with the main premise which is that most companies, Facebook among them, could do a better job of monetizing mobile advertizing. That being said, I am not so sure it is for lack of understanding or a lack of a desire to move forward in this space. This is a space that many companies have found increasingly difficult to monetize as users are not as tolerant of advertizements as they might be when surfing the internet. If the content on my phone is not clean or if the advertisement does not provide a clear benifit (think words with friends) I am not tolerant of it. The phone is smaller too which makes for much less space for advertising. Additionally, many of the display advertising which works on the computer does not work on the phone or load quickly enough. When thinking of all this, yes Facebook could advertise more on mobile devices but their money making machine relies on bringing users in, not driving them away with aggressive advertising. For this reason, Facebook has a very clean functional popular mobile application which is almost entirely without ads.
Facebook will succeed in mobile frontier as well. Based on a study by Business Insider Intelligence, the top three U.S. social networking activities on mobile phones are as following:
- Read a post from someone they know personally (80%)
- Posted a status update (70%)
- Read posts from "an organization, event, or brand (+50%)
The last point supports the thesis behind brand sites for "sponsored stories". The first two bullet points give a hint about the positive feedback loop for Facebook. These activities are the result of the Facebook effect. Business Insider recently studied mobile time per user. It seems like Facebook is widening the gap with its closest competitor, Google. Facebook has a big chance to turn this market share into profit.
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