Facebook Looks to Plug Mobile Advertising Revenue Hole by Friending Developers

By Peter Bernstein August 08, 2012

It is no secret that one of the big things Facebook is challenged by, putting aside all of the IPO issues, is the problem that its users are increasingly accessing the popular social media site from their mobile devices, but are not clicking on ads. 

In fact, CEO Mark Zuckerberg stated as much back in June that with 543 million people now accessing the website via smartphones or tablets, “Our goal is to help every person stay connected and every product they use be a great social experience...That's why we're so focused on investing in our priorities of mobile, platform and social ads to help people have these experiences with their friends."

While it may not drag the stock out of the doldrums, at least you have to give the Facebook friends an “E” for effort based on the recent blog by engineer Vijaye Raji, that appeared on the company’s official blog site. Entitled, “Introducing New Mobile Ads for Apps,” the blog steps developers through a new capability that Facebook hopes will prove alluring —giving developers more visibility and Facebook more ad revenue.

This is being pitched as a test, but it is clearly serious business. The numbers and the purported value proposition speak volumes. As Raji notes, “Facebook has increasingly become a way for iOS and Android developers to grow their apps. In the past 30 days, we have sent people to the Apple App Store and Google Play 146 million times, via clicks from channels such as news feed, timeline, bookmarks and App Center…Mobile ads are an additional way to drive people to apps. When a person clicks on one of these ads, if they do not have the app installed they will be sent to the App Store or Google Play to get it.”

Ease of use is a driver

The blog steps developers through the process of designing, launching and monitoring a mobile app advertising campaign. From the Facebook App Dashboard, you pick the app and audience, pop in your campaign budget, select the payment method and away you go. You can even select whether you wish to target Apple or Android users.

 Developers are asked to sign up for the capability to take it for a test drive. Facebook also states that, “To help us provide you with information about the effectiveness of your ads and the use of your app, integrate with the Facebook SDK 3.0 for iOS. We announced the beta of the iOS SDK a few weeks ago and are releasing it today.”

Where is this headed?

Is this the magic elixir that compels mobile device users to click on ads?  We shall see. For those of us who already use Facebook for playing such games as the insanely addictive “Words with Friends,” it already is a pain to have to skip all of the enticements we already are hit with before being able to make a move. Clicking seems to be a function of a number of factors not the least of which are context (am I out and about and don’t wish to be inconvenienced on my communications device of preference), form factor (desktop and laptops are great as user experience , tablets a small step down and smartphones at this point more annoyance than convenience), content (what can you do for me right now!). And, that is just the short list. 

Just as Facebook defined so much of what we take for granted as the convenience, utility and thrill of social media, whether they prove as adept at monetization of their large base as the nature of what it is always/all ways on morphs from sedentary to mobile, is the great imponderable. To say the least a lot is riding on them getting this right, including eventually allowing early investors to recoup their current paper losses.

Edited by Brooke Neuman
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