Facebook Makes Mobile Ad Push for First Time

By Gary Kim March 01, 2012
Facebook has begun making its important push into mobile advertising, announcing a new ad program that includes messages of various types that could appear on the 425 million mobile devices used by Facebook users to access the social network. Up to this point, though Facebook has been a leader in garnering display advertising, it has not had a viable and active mobile advertising capability.

Given the move by many leading application providers to a “mobile first” development strategy, that has been a hole in Facebook's revenue strategy.

The move follows the roll-out of ads on users' news feeds, which began in early January 2012. As part of that program, brands a user has endorsed by hitting the ‘like’ button will now be able to push deals and other updates right into the news feeds that show your friends' updates, photos and links.

The new program, “Premium on Facebook,” for the first time allows marketers can expand their reach on the social network by paying for a video, a coupon or other message to appear on the homepages of Facebook users, on the log-out screen and even within users’ news feeds. Until now the newsfeed had been free of paid marketing messages.

The new ads also mark Facebook’s first effort to generate revenue from the growing ranks of consumers who access the service on mobile devices.

About half of Facebook users access the service on a mobile device, but until now the company has not offered any mobile advertising - a drawback for marketers trying to reach those users. The mobile features are bundled with Facebook Premium programs.

“Mobile Facebook ads are huge. We’ll be all over this,” said Jason Goldberg, chief executive officer of online designer retailer Fab.com. “We’re already seeing more than 40 percent of our daily traffic to Fab from mobile. Being able to reach Facebook mobile users will only increase that.”

Facebook’s new mobile ads are part of the premium service. When companies buy a “premium” ad, they are paying for their message to show up in a several places on Facebook, including on the right-hand side of a user’s homepage, when people log out and, potentially, in the newsfeed.

Mobile remains a risk. “Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results,” Facebook has noted.

“We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven,” Facebook has said in a Securities and Exchange Commission filing.

Edited by Jennifer Russell

Contributing Editor

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