Ahead of Facebook's IPO, it's only natural that the social network is looking around for new ways to monetize its usage -- and please its new shareholders. Enter Facebook's latest revenue generator: Running ads on mobile versions of the site, which currently attract roughly 400 million monthly users.
Earlier this month, Facebook struck a deal with Bango, a United Kingdom-based, mobile-payment service provider that has the technology to enable commerce on mobile devices. And while terms haven't been disclosed, I've heard plenty of speculation that Facebook will unleash mobile advertising beginning as soon as March 1. And supposedly it will be unlike anything we've seen before.
Is this a potential boon to small businesses that currently advertise on Facebook or plan to do so? Does this move have the potential to present your business with an additional audience numbering in the hundreds of millions? Hold the wedding. Before you reach deep into your advertising budget, here are a few thoughts I have on the issue:
First off, the notion of mobile advertising strikes me as intrusive, annoying and alienating. For one thing, it’s hard enough to read anything crammed onto a 2-by-3-inch screen, and now you want to crowbar an ad onto that limited real estate? And I’m not even going to go into what that ad might do to the connection speed or lack thereof. When it comes to my mobile device, don’t interrupt my experience -- enhance my experience.
In order to do this, Facebook must move beyond traditional digital advertising as such a large percentage of its revenue and instead evolve advertising in unique and compelling ways around user-generated content without being overly intrusive.
About 85 percent of Facebook’s revenue currently comes from advertising, compared to about 95 percent of Google’s. But Google can be forgiven because its marriage of search and advertising is a natural part of its value proposition. Not so for Facebook, which may eventually run into trouble if it continues to rely on revenue from a product that is not inherently part of its value proposition to users.
If Facebook is smart about this thing, they’ll deliver me an ad that’s geo-location specific, interactive and initiated by me. But limiting my News Feed view with a soft drink or automotive ad -- something I don’t need at the moment -- is likely to prompt me to ditch my FB mobile app.
Of course, I could be wrong. According to eMarketer, two-thirds of mobile phone users say they’re comfortable with mobile ads. And Nielson reports 51 percent of consumers are OK with advertising on their devices if they can access content for free.
So what's the relevance of all of this to you and your business? Tread lightly where mobile advertising is concerned because you might just alienate users. Worse yet, you might pay for something that no one chooses to see.
How have you used mobile devices to spread the word about your business? Leave a comment and let us know.
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Comments:
I believe that ads are a necessity not only for the mobile user that is looking for or becomes interested in a product that he/ she views but also the brands themselves. Brands and small business owners will always have to be creative no matter how great the technology! New advertising platforms (mobile and internet) will have to provide new technologies but also create a new trend on how are ads are published! There is still a lot that can be done in advertising that will benefit everybody! The problem at the moment is that everybody is looking for the right solution and it is out there!
It's great to see you writing on this topic, Mikal. As a web developer particularly bullish about the mobile web, it still remains a challenge to present unique and informative content in a creative way while respecting current bandwidth constraints. Internal tests have shown that for every 1 second in page load speed, particularly on the mobile web where bandwidth and connection quality is critical, bounce rates increase by 11%. Notwithstanding limiting real estate which is a very valid point, adding additonal widgets, ads and other superfluous scripts necessarily slows down load speed on mobile and directly increases bounce rates. As a result, this will dramatically reduce the possibility that not only the page which contains the slow-loading ad will be read but additional pages derived from the same visit.
I am not a fan of mobile advertising but it is already present on our phones no matter if we like it or not. If you use Google to do a local search the first 2 positions are paid advertising and they take up 30% of my 4 inch screen followed by a one inch map, my repair shops listing! and one of my competitors listing. I think we have trained ourselves to ignore the extra "noise" that advertising has become. We just automatically scroll down to whatever catches our eye. If Google and Facebook would make there ads more natural looking and flow with the page they would receive better traffic. They need to trick us to believe the advertisement is just another natural search result not an obvious ad, at this point it would be less annoying.
It's great to see you writing on this topic, Mikal. As a web developer particularly bullish about the mobile web, it still remains a challenge to present unique and informative content in a creative way while respecting current bandwidth constraints. Internal tests have shown that for every 1 second in page load speed, particularly on the mobile web where bandwidth and connection quality is critical, bounce rates increase by 11%. Notwithstanding limiting real estate which is a very valid point, adding additonal widgets, ads and other superfluous scripts necessarily slows down load speed on mobile and directly increases bounce rates. As a result, this will dramatically reduce the possibility that not only the page which contains the slow-loading ad will be read but additional pages derived from the same visit.
The ads may be cumbersome but for advertisers, this presents a great medium to reach customers. For starters, with such a small screen, it is impossible to miss the ad. Additionally, while on a smart phone, these ads become interactive and take you straight to the promotion. While they could be annoying for users, there is great value in this.
Thanks Mikal a 'Food for thought' article, mobile whether marketing or not is becoming a huge feature in our lives. Marketers will have to establish themselves in "pull" marketing, offering the consumer what they are looking for wherever they are, and whenever the consumer is needing that information. Old fashioned "push" marketing is truly out the door, which is great. Local, map navigation, short messages or video with something 'in it' for the consumer, constantly remembering it is only 'if and when' requested.
Mikal, I'm one of those who would not like advertising on my mobile phone. It's already cumbersome enough to get on Facebook or other sites using even the best phone. You won't see me advertising on mobile apps either.