Mobile-Only Ads: What This Means for Facebook and Their Advertisers

Kye Mou
June 7, 2012

Earlier this week, Facebook announced the ability for direct advertisers and agencies to buy sponsored stories* on mobile devices, exclusively. Prior to this, Facebook controlled whether or not an advertiser’s sponsored story would appear in a user’s news feed for mobile devices. Furthermore, marketers had no choice in when their sponsored stories were shown and no means of segmenting out the performance by desktop and mobile. For those familiar with Google AdWords advertising, this new Facebook functionality is equivalent to desktop and/or mobile device targeting for paid search campaigns.

The sponsored stories targeting options now available through the ads API and Power Editor are:

  • All placements: this option includes right-hand side, News Feed desktop and News Feed mobile
  • All desktop placements: this option includes right-hand side and News Feed desktop
  • News Feed (desktop and mobile): this option includes News Feed desktop and News Feed mobile
  • News Feed desktop: this option includes News Feed desktop only
  • News Feed mobile: this option includes News Feed mobile only

What does this mean for Facebook and their advertisers? This change certainly provides marketers with more control over their ads and visibility into their data for optimizing campaigns. But to anyone familiar with advertising, this also means more ad revenue for Facebook. Consider these figures: Facebook made $3.2 billion in ad revenue last year, primarily from desktop advertising. And as of December, there were 901 million monthly active users, with 500 million of those being mobile. With the flood gates now open for sponsored stories on mobile devices and the continued growth of monthly active mobile users, it’s clear that Facebook is set to generate hundreds of millions, if not billions, of dollars in revenue from this untapped mobile ad market.

Though this announcement appears to be a win-win for Facebook and their advertisers, it remains unclear as to how mobile users will react to seeing these new ads in their news feeds. As a thought, Facebook may want to consider providing more visibility into the algorithm that influences the ads appearing in a user’s news feed, such as click-through-rate. This algorithm might be similar to Facebook’s existing EdgeRank, which factors Affinity, Weight and Decay into the ranking of social content appearing in news feeds. Developing a transparent and effective metric to promote ad relevancy would benefit marketers and Facebook users in a landscape of dynamically changing content and consumer intent.

Share your thoughts with us on this announcement in the comments section below.

*Sponsored stories allow Facebook advertisers to surface word-of-mouth recommendations about their brand that exists organically in the Facebook News Feed. Sponsored stories are different from ads and can amplify the brand engagement of the target audience. For example, if a person’s friends like a Page, in addition to seeing that news story in their News Feed, they can also see the same story on the right-hand column. Sponsored stories are available for ads that promote a Page, Place, Application or Domain.

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