As use of smartphones and tablets continues to grow across the U.S. and Europe, so too does the volume of traffic reaching Facebook’s services from those devices. Despite that fact, the social media giant has made no attempt to monetize its growing audience through mobile advertising to date, as rival digital companies including Apple and Google place increasing emphasis on the channel.
According to Facebook over 200 million of its active users now access the network from mobile devices, representing 40 percent of its 500 million total membership. Mobile users are also twice as active on Facebook than non-mobile users, the company says. In spite of the commercial potential of that audience, CEO Mark Zuckerberg has appeared reluctant to alienate mobile users with ads.
“We only want to launch stuff that we think is really good and that can be a stable building block for us in the future. And I think we just need to see what makes sense for mobile advertising. But in the short term there’s no pressing need for us to monetize that immediately,” Zuckerberg told Reuters following the launch of the company’s location-based “Deals” platform late last year.
In reality, however, the company is already monetizing its mobile audience, having launched the Deals platform in the U.S., Hong Kong, Singapore, and across Europe since November with support from major brands in each market. Though that product differs from a straight mobile advertising play, it’s clear the firm is well aware of the potential revenue opportunities mobile devices present.
As Zuckerberg points out, though, the mobile space remains in its infancy, and players within it are experimenting with various business models and monetization strategies to varying degrees of success.
“I think actually in a lot of ways we benefit from waiting and seeing what more people do in this space,” Zuckerberg said, adding,” Our goal is going to be to expand [our audience] and deliver more value for more people before focusing on how we can reap that.”
Recent data from online measurement service comScore implies the company is doing exactly that, growing its U.S. and European audiences by more than 120 percent in the three months ending December 2010, on a year-over-year basis. Besides that reach, however, comScore suggests the network is also engaging users more than any other property. In the U.K. during December, users spent over 2.5 billion minutes on Facebook, with Google and Yahoo sites ranking second and third with a total of 702 million and 373 million minutes, respectively. Users spent twice as much time on Facebook.com than they did with the rest of the top ten U.K. sites combined, demonstrating its potential impact on the mobile ad space if it were to roll out a mobile ad platform.
To help further drive that presence the company launched a feature phone application in January, designed to bring the network to lower-end handsets besides just iPhone, BlackBerry and Android devices. Last year it also launched Facebook Zero, a stripped down mobile version of the site designed to make use of less data, and therefore appeal to users in emerging markets such as India and South America.
Most likely to accelerate its mobile ad capabilities, Facebook last month acquired Rel8tion – a stealth-mode startup creating technologies to help improve the relevance of mobile ads.
It might not be selling ads yet, but Facebook is clearly heavily invested in the mobile space with a view to monetizing that audience. Whether it attempts to do so through display solutions akin to those offered by Apple and Google’s AdMob, or through its existing location-based Deals platform alone remains to be seen, but the sheer number of users accessing its network from mobile devices suggests a growing opportunity for both Facebook and marketers alike.
GroupM predicts that global ad spend will top $547 billion next year, up from $524 billion this year. While television will still capture the biggest share of that 12-figure pie (41%), digital's share will grow from 31% to 33%.
Brand advertisers and their agencies only want to pay for mobile ads that are seen by a person.
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