Facebook’s brilliant star continues to rise in the tech world, and yet they have yet to truly grab mobile by the throat in the way which equals their grip on the PC platform. Why? Because their plan for advertising on mobile would require some fundamental changes in the mobile world to work.
The axis of Facebook’s issue comes down to advertisements: When you surf Facebook on your PC, you are served lots of ads (from which Facebook makes money). If you surf Facebook on your mobile device, you don’t see ads. How, then, does Mark Zuckerberg’s Little Blue Engine That Could make money from mobile? It’s not exactly correct to say they’re losing money, as most mobile Facebook users also access it from their PC. Yet, every visit to Facebook in which they can’t charge for ad revenue is a lost opportunity, and Facebook knows it. And notice that it’s most Facebook users who swap between platforms; an estimated 83,000,000 users only access via mobile. And they’re doing it ad-free. What’s more, that body of mobile-only users is growing, and Facebook is paying attention.
This is why Facebook’s Sponsored Stories have suddenly appeared. The stories are served right in the middle of your feed, regardless of platform, and are a great way to get ad revenue boiling in the mobile space. Naturally, Facebook tailors the ads to serve you the kind of thing they know you’re going to be interested in (as they keep pretty close tracks on you), and that sort of customization means the ad is worth more in profits. Here’s a bit from GigaOM:
“If Facebook is successful, one of the impacts will be that it will grow mobile advertising overall,” [analyst Noah Elkin] said. Google, Apple and Millennial Marketing wouldn’t stop growing in the mobile ad space, but Facebook’s mobile ad revenue would be additive. In fact, one of the reasons eMarketer is projecting such huge growth in U.S. mobile advertising — jumping from $1.45 billion in 2011 to $10.8 billion in 2016 — is because it projects Facebook will precipitate a surge in new ads starting in 2014. If Facebook flops, then eMarketer will have to revisit its growth numbers, Elkin said.
So, in other words: Ads along the side of the screen and ads in the middle of the content itself. A user’s dream come true.