Facebook’s New Mobile Advertising Platform

One of the 35 ‘risk factors’ that Facebook stated in its SEC filing was that its Mobile platform did not display any advertisements. This has been seen as a major hindrance to the company’s growth prospects as close to 50% of all Facebook members (900 million upwards) use mobile phones / devices to access the site. Social networking on mobile devices is the way of the future and Facebook stands to lose a chunk of ad revenue if it doesn’t find a way to generate cash flows from this platform.

To remedy this issue Facebook is allowing marketers, exclusively for mobiles, to buy Sponsored Stories in the News Feed section, which up until now had no advertisements.

The Sponsored Stories platform was introduced in January last year. Despite the tepid response, Facebook, last December, made its plans, to display the sponsored links into the News Feed, public.

Advertising options

So now marketers can buy and specify as to where (computers, mobile or both) they want their advertisements to appear. In case of computers, they also have the option to combine the placements in the News Feed section with the ones on the right-hand side.

So long story short there in all 3 options available to marketers to place their advertisements:

  1. Right-hand side of the page for computer users
  2. News Feed for mobile users
  3. News Feed for computer users

The marketers can exercise these options in four different ways

  1. Place advertisements in all the designated places.
  2. Use only computer placements, i.e. News Feed and the Right hand Side section.
  3. Use only News Feed for both computers and mobile devices
  4. Use News Feed for either mobile devices or only computers.

Up until now marketers had no say as to positioning of their advertisements. They were also not able to review the performance and efficacy of their ads. This change is set to give greater control to marketers in terms of placement of ads and more data that will enable them to analyse the performance of their advertisements and thereby hone their campaigns.

It remains to be seen whether the inclusion of advertisements exclusively for mobile devices in the News Feed lives up to its promise and results in a better conversion rate as compared to that seen in computers.

However there is no doubt that Facebook needs to find an effective way to generate revenues money through their mobile devices platform. Only time will tell whether this new product is the one is that effective way.

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