Retailers shift their ad spending from TV, radio and print ads to digital ads.
Reports suggest the social network will launch the service, which would power ads off its core site and app, at Facebook’s F8 developer conference later this month. The offering, which could provide retailers with another way to target mobile consumers, could prove a lucrative way for Facebook to leverage the data it gathers about its users, says one expert.
Facebook Inc. may be ready to lift the veil on its much-anticipated mobile ad network at its F8 developer conference later this month, according to a new report on the online news site Recode.
The social network in January announced it was working with a small number of advertisers and publishers to run a test simulating a “mobile ad network” that uses the information consumers share on its platform to place ads on mobile apps. Facebook says the test is helping it understand the targeting tools and functions marketers need to drive shoppers to buy.
A Facebook mobile ad network might enable a retailer, for example, to target a Facebook user who Likes the Chicago Marathon on Facebook or posts about running on the social network with an ad on a news site that he sees when he’s near one of its bricks-and-mortar stores.
Facebook says the Recode report is a “rumor” and declines to comment.
But if the rumor proves true, a Facebook-powered mobile ad network could leverage the vast amount of information it knows about its users’ interests to distinguish its offering from competing services that already exist, which include Google Inc.’s AdMob and Twitter Inc.’s MoPub mobile ad networks, says Melissa Parrish, a Forrester Research Inc. vice president, research director, who covers both social media and mobile.
Despite the presence of large online companies like Google and Twitter, Parrish says mobile advertising in general and mobile ad networks specifically are still in their early days.
“Mobile advertising has yet to come of age,” she says. “Once it does it will look very different that it looks now. Facebook has a chance to take it in a new direction by developing a proprietary Facebook-powered format. But for mobile to become a powerful advertising format that doesn’t turn off users because it interrupts what they’re doing or because of privacy concerns, the ads will have to become mobile-specific and not just a little version of what desktop ads look like. A mobile ad network is an intelligent way for Facebook to embark on that route.”
Even without a mobile ad network, Facebook has been increasingly focused on transforming the social network into what it calls a “mobile-first” platform. Mobile ads in the fourth quarter of 2013 accounted for more than half of the social network’s advertising revenue for the first time.
But in developing a mobile ad network, Facebook is continuing to diversify its business. Facebook is no longer just a web site and app, it also owns the photo-sharing service Instagram, the instant messaging app WhatsApp and the Facebook Paper app, which lets users browse elements from Facebook, as well as read stories from a number of digital publications.
“Social media is changing,” Parrish says. Facebook, she says, is trying to figure out how to evolve with the increasingly diverse ways consumers are connecting to each other.