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Facebook's Foray into Mobile

By Marian McMillon | February 11, 2012

facebook, mobile advertising, advertising

Upon dropping its S-1 to file for an IPO last week, Facebook revealed one of its top concerns: monetizing its mobile traffic.  Approximately $3.14 billion of Facebook's revenue came from advertising in 2011.  However, none of it derived from its mobile platforms.


“We believe that mobile usage is critical to maintaining user growth and engagement over the long term,” the company wrote in its filing with the SEC, according to FT Tech Hub.  The filing mentions the word mobile over 120 times.

Roughly half of Facebook’s active monthly users accessed it in December through a smartphone or mobile-optimized website.  With the expectation that this number will continue to grow in 2012, the company needs to find a way to generate revenue from mobile usage.

Facebook has not released any information about its mobile strategy; nevertheless, rumors are spreading about the different tactics they may employ.  

According to CNET, there has been talk that advertising on its mobile app will be similar to the way it display ads on the website.  For example, ads will appear in the news feed. 

The step into mobile advertising needs to be done carefully, because many users find mobile ads intrusive and annoying.  But if Facebook wants to increase its revenue stream from advertising, determining a mobile strategy within the next year is key.  

COMPETITION

Facebook's biggest threat is Google and its Android operating system.  Android devices account for nearly 30 percent of all smartphones and every Android phone offers Google's social networking site, Google Plus.  Google has been including ads in its mobile apps.

Facebook is at a disadvantage when it comes to experience with mobile advertising, but they do have one unique edge against all other threats.  The company has a better insight into consumer behaviors than any of its competitors.  Facebook users are constantly disclosing all sorts of personal information - revealing their likes and dislikes - which gives Facebook the opportunity to target advertising in remarkable ways.