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Has Facebook Finally Mastered Mobile Marketing?

Wednesday, March 6, 2013

More than anything else, Facebook‘s lack of revenues from mobile advertising led to its acutely disappointing initial public offering of stock last May. It seemed to investors that the company had simply failed to pay attention to the obvious fact that hundreds of millions of its users were accessing the service via smartphones and tablets–where they then saw almost no ads.

In researching a story out that runs Wednesday on MIT Technology Review magazine’s website, How Facebook Slew the Mobile Monster, I found that Facebook executives were quite aware of the mobile trend, even if they were distracted by other concerns such as the new social ads called Sponsored Stories it had just introduced. And once Facebook put its collective mind to it, it actually moved much faster–even by the time of the IPO–to find compelling ways to show ads to the mobile masses than most people at the time realized.

It did take a few months for Facebook’s mobile ads to get traction. But as of the fourth quarter, mobile ad revenues had rocketed up to $305 million, or 23% of overall ad sales. That’s a prime reason Facebook’s shares are now hovering a little under $30 a share, close to double the low they hit a few months after the IPO.

One big reason for the success of mobile ads: Unlike the desktop ads that run on the right side of the page, these ads not only run in the news feed, but they look and feel more like natural posts than conventional banner ads (though they are labeled as sponsored). It didn’t hurt that Facebook also latched onto the app craze, giving developers app install ads that have proved both popular and effective.

As I say in the story, Facebook’s mobile ads also address a key concern of advertisers about mobile ads–that they are too small to have much of an impact. On Facebook’s mobile news feed, however–and that’s the only place the ads run–they actually take up a large part of the screen. “Our ads are big and flashy,” David Fischer, Facebook’s vice president of advertising and global operations, told me with a smile. But they’re apparently less annoying than big ads would be on the desktop because it’s so easy to swipe them away on a smartphone or tablet screen.

What’s more, the ads may be getting even bigger and flashier soon, if rumors about changes to the news feed that Facebook will announce Thursday are true. And Facebook is actively looking at incorporating video into mobile ads as well.

You could argue that, at a time when the mobile landscape is still changing fast, it’s still early to declare that Facebook has slain the mobile ad monster. But it’s at least clear that the monster isn’t so scary anymore (Forbes)

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