Facebook is the leading app on the iPhone. But does that popularity as an app mean that Facebook would have success with its own branded handset?
Next week on April 4 Facebook seems poised to introduce some version of the long-rumored "Facebook phone." The speculation is that it will be an HTC-made handset carrying a "forked" version of Android. We'll see. But I'm extremely skeptical that anything like can succeed at scale.
HTC previously made two Android handsets in 2011 with deeper Facebook integration: the ChaCha and the Salsa. They both flopped. INQ has also made social-media-centric handsets since 2009, which have not done especially well.
Let's assume that everything on the hypothetical HTC handset is deeply integrated with Facebook: contacts, dialer, camera, maps, apps, messaging and so on. Let's also assume that everything works elegantly. It's highly unlikely that there will be mass-market demand for this phone.
Most people are not so involved with Facebook that they would turn over this most important piece of personal technology to the company. There will also be the inevitable privacy questions and concerns ("Is Facebook tracking me?"). Most people I know are quite content to use a Facebook app on their smartphones. The notion of an entire handset devoted to Facebook seems excessive and unnecessary.
Perhaps the phone will offer some unique and impressive functionality or be priced extremely aggressively. Perhaps "younger people" will be interested. I remain very doubtful, however, that the majority of users will want to buy a smartphone so closely aligned with a single social network.
While a few ads shown during yesterday's Super Bowl were noteworthy most were a bust -- and largely a waste of the nearly $4 million it reportedly cost to buy airtime during the game. Matt McGee at Marketing Land did a nice job of tracking and reporting on social media mentions or "calls to action" on most of the ads (Twitter and hashtags were most common).
Oreo is emerging as one of the big winners, with its fast reaction to the game's 30+ minute power outage.
Yet for all the energy put into associating ads with hashtags and social media, there was an almost total absence of explicit mentions or references to mobile. The only mobile app mention that I was aware of came on a quickly shown credits screen during an ad for the forthcoming Star Trek sequel (upper right image). Exact Target confirmed my own informal sense of that yesterday.
A large percentage of people watching the game in the US were smartphone owners. As you already know, and as Nielsen and others have confirmed, there's a very high level of "second screen" behavior among smartphone owners. These Super Bowl ads were a huge opportunity to drive app downloads for brands. And other than the Star Trek mention, which raced by in less than a second, nobody talked about apps at all.
One might have expected real estate company Century 21 to mention its mobile site or app in its several mediocre commercials given that so many people use mobile during their house hunting. But they did not. I could go on with numerous other examples.
Perhaps the assumption among the agencies that produced these commercials was that people would be using Twitter or Facebook on their smartphones or tablets and the mobile call to action was thus implied. Yet it's more likely that marketers didn't really know what to do with mobile specifically and so were simply silent on the subject.
Facebook delivered the goods this afternoon. The company beat analysts' estimates and reported quarterly revenues of $1.56 billion and $5.09 billion for the year. Advertising revenue for the year was roughly $4.3 billion.
Despite the beat, Facebook shares were down after hours.
Advertising revenue for Q4 was $1.33 billion, or 84 percent of total revenue. Impressively mobile advertising represented 23% of total ad revenue, which is up from 14% the previous quarter.Even more significantly Facebook said that mobile daily active users exceeded web daily users in Q4 for the first time. CEO Mark Zuckerberg characterized Facebook as "a mobile company" accordingly.
There were 680 million mobile monthly active users in Q4 (compared with just over 1 billion in total). Of those 157 million were mobile only users.
Independent analyst Ben Evans has teased out a range of Facebook mobile usage and user data, partly derived from the company's own public statements and partly from his own calculations. You can read what he says here. Below I use some of his data and one of his charts.
Mobile users as of Q3 2012 (mostly public numbers):
Accordingly, roughly 44% of Facebook's global user base doesn't access the site on mobile according to the company's own data. However that figure is likely to get smaller over the next 12 - 24 months and become a very small minority.
Evans estimates the following smartphone app usage for Facebook (based on Q3 data above):
Below is a chart from Evans showing the relative growth of Facebook access on the various mobile platforms from September 2011 to September 2012:
Assuming these numbers are accurate you can see the reversal of positions of the iPhone and Android since last year, which makes sense. However the larger point is that a majority of Facebook users now access the site via mobile.
Facebook has argued that mobile is ultimately a much larger revenue opportunity than the PC. The following verbatim Facebook remarks come from the Q3 earnings call transcript:
Social and paid-search ad platform Kenshoo came out with data today that argue the percentage of ad revenue coming from mobile is now up to 20.3%.
Facebook is expected to generate roughly $1.5 billion in overall revenue in Q4. Not all of it is ad revenue, however. Roughly $260 or so million would be attributable to mobile if the 20.3% figure holds and the forecast is correct.
Google sees lower CPC prices on mobile paid search ads but better performance on mobile devices vs. the PC. However Facebook is experiencing the opposite phenomenon, according to Kenshoo. It sees higher mobile prices but lower engagement vs. the desktop.
Social networks and social-mobile apps are undeniably mainstream at this point. Indeed, mobile is where much of the growth is happening for social media. A new report, compiled from Q2 data and issued by Nielsen, illustrates this and compares time spent and access by media device.
What the data show is that the amount of time people are spending with mobile devices (vs. PC) is growing and that mobile apps continue to be where mobile time is concentrated. Along with smartphone and tablet penetration, mobile time overall has grown vs. 2011 but growth has been concentrated in mobile apps. They see roughly 79% of consumer time with mobile media and the mobile internet.
Mobile media time overall is now roughly 43% of the time spent on PCs as of Q2 2012.
Mobile use of social networks tends to show slightly higher levels of engagement than on the PC. In mobile, as on the PC, women tend to be more engaged than men. But the most engaged groups are slightly different in each category.
The most engaged group of mobile social media users is the 25 - 34 age range, whereas on the PC it's the 18 - 24 year old cohort.
The following chart illustrates that among the major social sites, Facebook dramatically leads in terms of time spent (although Instagram isn't present on this list). In addition, time is roughly divided 85% mobile apps vs. 15% mobile web. And while the ratios are slightly different for each social media publishers the directional trend is the same -- toward mobile apps.
Nielsen also looked at the major ways in which consumers connect to the Internet generally. It found that the PC was still the dominant way but that PC penetration was down slightly since a year ago. By contrast, as you might expect, mobile access to the Internet has grown significantly on smartphones and especially on tablets.
Marketers who continue to ignore or only nominally address smartphone and tablet users -- especially app users -- are losing access to an increasingly large user base and may be doing their brands and reputations harm in the process.
Bango says this will allow users to buy game credits, apps and other virtual goods through "frictionless operator billing, paying on their phone, without the need to register personal details."
Bango also has deals with Google (Play), Amazon, BlackBerry App World and Opera's Mobile Store. The company added that its conversion rates are higher than the industry average for carrier billing:
Conventional operator billing is expected to achieve a 40% conversion rate. Put simply, most mobile commerce customers who click ‘buy’, do not successfully buy. Billing with the Bango payment platform delivers an average conversion rate of 77%. Most users who click ‘buy’, do buy.
While carrier billing is useful in countries where there are many "unbanked" or where the specific transaction is likely to be conducted by a younger user, in the US and much of Europe credit cards are a preferred method of payment by most adults.
Carrier billing is much more widely available than other forms of mobile payments for obvious reasons. However carrier fees are much higher typically than credit card fees and settlement can take months depending on the country.
Even though Facebook eliminated Facebook Credits, which was a surprise to me, it's possible that Facebook will eventually acquire a mobile payments provider. Bango's market cap, for example, is only $118 million. Facebook could buy the company and associated revenue stream, as well as a set of global carrier relationships -- instantly.
Amazon is the king of mobile retail; Wal-Mart is the leader of offline check-ins. Last week there were two sets of parallel data released that provided some insight into how consumers are using mobile devices, both for "m-commerce" and in stores.
Data from comScore found that among US smartphone owners “4 out of 5″ are going to retail site/apps on their handsets. Some of this is in-store price and review checking.
ComScore put the total number of mobile-retail visitors at roughly 86 million. Unsurprisingly Amazon was the leading retail destination with an audience of almost 50 million smartphone owners.
These mobile-retail site visitors were both somewhat younger and more affluent than corresponding retail site visitors on PCs.
The number four mobile retailer on the list above, Wal-Mart, is the leader when it comes to in-store check-ins. According to data compiled by LocalResponse this summer from Twitter, Foursquare, Yelp and Instagram, Saturday is the most popular day to check in followed by Friday and then Sunday. Most check-ins occurred in the afternoon or early evening.
LocalResponse also found that men were more likely than women to check in. However gender check-ins by store varied, with Target being the most popular store for women. BestBuy was the most popular check-in retail location for men.
While some retailers are creating incentives for users to check-in, this should be exploited much more aggressively both to get people into stores and as a corresponding analytics tool to indicate the success of various promotions. Hashtags, offers and other mechanisms could be used to track specific promotions. In addition, users could be "messaged" (on Twitter) or otherwise notified (i.e., on Foursquare) while in stores with further promotions and rewards.
In general traditional retailers have yet to fully recognize the potential and utilize social media check-ins for in-store loyalty and sales purposes.
Facebook is testing mobile ads on third party sites, according to two published reports. Right now this is a "small" beta test and an extension with what Facebook has been doing with Zynga for several months. According to a statement provided to AdExchanger:
“We are going to begin showing some ads on mobile outside of Facebook,” the rep said. “We’ve been showing ads off of Facebook on Zynga for a few months, and we think showing ads on other sites outside of Facebook is another way to show people relevant ads and let them discover new apps.”
Facebook is using various mobile ad exchanges to serve ads (IAB standard units) in apps or on mobile websites. TechCrunch offers a nice explanation of how the Facebook-user data gets to the ad exchange and ultimately to the third party sites and apps:
On the back end, advertisers set a bid they’re willing to pay Facebook to reach a certain demographic of users. Meanwhile, Facebook syncs its anonymous user IDs with several mobile ad exchanges. When a Facebook user visits one the apps or sites where these exchanges have placements, the exchange instantly sends Facebook that user’s ID and asks if there’s a bid set to target them. If so, Facebook pays the ad exchange some portion of the bid, and the ad is shown to the user.
It appears that most of the targeting will be demographic. It doesn't appear that location will be an element of the targeting at this point.
For now it appears that Facebook won't have direct relationships with mobile publishers and developers. However it will own the advertiser relationships. If all goes well it this would offer Facebook a way to generate additional mobile ad revenue without compromising its Facebook mobile user experience with irrelevant ads.
There have been rumors of a "Facebook phone" for at least two or three years. Facebook clearly needs to figure out mobile, so it's logical that Facebook would be talking again about a branded device. According to the New York Times over the weekend:
One engineer who formerly worked at Apple and worked on the iPhone said he had met with Mark Zuckerberg, Facebook’s chief executive, who then peppered him with questions about the inner workings of smartphones. It did not sound like idle intellectual curiosity, the engineer said; Mr. Zuckerberg asked about intricate details, including the types of chips used, he said. Another former Apple hardware engineer was recruited by a Facebook executive and was told about the company’s hardware explorations.
It's worth mentioning that there have already been quasi-facebook phones, from INQ and HTC (Status). The Status had the distinction of being the first phone with a "dedicated share button." By most accounts these phones are not huge successes. The Status appears to be an outright failure.
Presumably the model for any coming Facebook phone is the Kindle Fire, a highly customized version of Android. Facebook could then have an app store, develop mobile advertising, have a mobile browser and so on. The logic is clear.
The problem is that a Facebook phone is likely to fail. Most people would not want to "commit" that fully to Facebook and would likely be concerned about privacy and how their contacts and other data were being used or exploited by the software. By the same token, the availability of Facebook apps on major smartphone platforms is going to be sufficient for the overwhelming majority of people.
There will be a small slice of the population that would appreciate deep integration of Facebook into a handset (those might be younger users). But it will be a minority.
We may ultimately see a "Facebook phone" but I don't think it would be competitive with the iPhone and other Android handsets -- at least not in North America.
This morning Facebook is trading below its $38 offering price. This reflects investor skepticism about the long-term outlook for the company. Indeed, there are many challenges ahead for Facebook -- one of which is mobile monetization.
This weekend the company bought yet another mobile site, Karma. Karma provides a streamlined way to deliver physical gifts to people through their smartphones, using the Facebook infrastructure. While this latest acquisition is undoubtedly about getting access to the team it is also about the business model and new ways to generate revenue from mobile devices.
I have argued one reason (clearly not the only one) that increasing numbers of people use smartphones to access Facebook is avoiding the clutter of the PC site and ads in particular. While Facebook has started to show Sponsored Stories in mobile users' newsfeeds it cannot simply duplicate the ad environment online in its mobile apps. Too many ads would alienate users.
So how does Facebook make money off mobile usage in a way that doesn't make users abandon its apps? Here are a few ideas:
Some or many of these ideas could come to pass. Regardless, Facebook will need a range of approaches and revenue streams in place to truly deliver the kind of mobile revenue performance that investors will want and will become imperative as more users access Facebook primarily via mobile devices.
On Friday the Pew Internet Project released survey data that showed significant usage of "real-time location-based information" by smartphone owners in the US. Earlier consumer surveys have shown that 90% or more of smartphone owners have used their devices to get "local" or location-based information (at one point or another).
When you consider that Google Maps is either the top app or one of the top two apps on the iPhone and Android the Pew finding is obvious and not a surprise. Indeed, Pew never clearly defines the cluster of sites, apps or services that constitute the location-based information category. That may be because the question is asked in that way, without further definition, to consumers.
An additional finding from the survey is that 18% of smartphone owners are using "check-in" services like Foursquare:
In November 2010 Pew said that only 4% of survey respondents were using "geosocial" or "check-in" services.
We should see "location-based services" hit 100% usage or penetration among smartphone owners, depending on how the category is defined. That's because every smartphone owner is going to eventually use a map or check the weather or look up a restaurant.
Facebook has again updated its S-1. There are a few reasons for this, including the awarding of additional stock to employees. However there's a very interesting discussion of mobile in the revised document (pointed out by TechCrunch). On page 14 of the document Facebook reiterates uncertainty around its ability to make money off mobile users:
We had 488 million MAUs who used Facebook mobile products in March 2012. While most of our mobile users also access Facebook through personal computers, we anticipate that the rate of growth in mobile usage will exceed the growth in usage through personal computers for the foreseeable future, in part due to our focus on developing mobile products to encourage mobile usage of Facebook.
We have historically not shown ads to users accessing Facebook through mobile apps or our mobile website. In March 2012, we began to include sponsored stories in users’ mobile News Feeds. However, we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven. We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected.
The only mobile ad unit currently used by Facebook is Sponsored Stores, which put brand and advertiser messages in the user news feed. These units have proven to be successful on the PC but could become annoying to users on mobile devices. I have not yet seen any of these ads myself.
One reason why mobile usage is growing so rapidly for Facebook is a result of general smartphone adoption among Americans. There are also things about the user experience in mobile that are superior to the PC: the ability to take and immediately upload pictures, for example.
There may be another reason why usage is migrating to mobile: ad avoidance. People may be choosing the mobile version of Facebook over the PC site precisely because there are fewer ads; it's a "cleaner" experience. If my theory is correct then Facebook has a major problem on its hands. As Facebook puts more ads in mobile to make money it risks alienating users if the company is not very careful and thoughtful.
Mobile ads on Facebook will have to add value, be compelling (offers) or highly relevant (local) in order to work. For this reason I expect Facebook to make a major mobile ad-network acquisition. This would be for the "infrastructure," the expertise and the inventory. It would be analogous to what Google did with AdMob.
A couple of days ago local-social startup Glancee announced that it was being acquired by Facebook:
We started Glancee in 2010 with the goal of bringing together the best of your physical and digital worlds. We wanted to make it easy to discover the hidden connections around you, and to meet interesting people. Since then Glancee has connected thousands of people, empowering serendipity and pioneering social discovery. We are therefore very excited to announce that Facebook has acquired Glancee and that we have joined the team in Menlo Park . . .
Glancee, which is really just a 2.0 version of the original Loopt, adds to Facebook's growing arsenal of mobile assets. The social network has identified mobile as both an area of vulnerability and opportunity. In the Facebook IPO roadshow video COO Sheryl Sandberg calls out mobile as "a key area of growth for Facebook."
What she's talking about is revenue rather than usage. The company already has more than 500 million active mobile users. And Flurry Analytics recently said that social networking activities now consume as much daily mobile app munitues as games, the former number one category. Much of that activity takes place within Facebook.
The purchase price of Glancee was not disclosed but we can assume it was an "acquhire," rather than a technology acquisition -- though there may have been a bit of technology that motivated the purchase.
Glancee was part of a group of "passive" or "ambient" location startups that include the over-hyped Highlight and a dozen others. I have argued in the past that ordinary people (as opposed to those in the tech industry) don't want to continuously broadcast their locations even to close friends and colleagues. Accordingly these friend finding and pseudo-dating apps are destined to fail unless the offer some other angle or utilitarian functionality.
Facebook may choose to use some of Glancee's capabilities as part of a new version of its app. But my guess is that Glancee, like Gowalla, will be completely shuttered and that Facebook won't turn its app into a ambient friend finder. That would complicate the privacy picture for Facebook -- though I expect geofencing and geotargeted advertising to be part of what Facebook eventually develops for mobile marketers.
We're likely to see more acquisitions from Facebook as the company continues to build up its mobile capabilities. What the company hasn't figured out is how to make money in mobile, commensurate with its mobile usage. It now pumps Sponsored Stories through its users' news feeds, having just introduced mobile advertising. However that by itself won't fulfill the mobile ad revenue imperative about to be imposed on Facebook by its IPO.
If Facebook has its way "advertising" will be a thing of the past. Facebook wants brands to tell engaging "stories" instead, and turn all us passive "fans" into passionate brand advocates. Facebook wants brand and marketer content to be as good or better than any content or messages that your friends or family might generate. The content is the ad campaign and vice versa.
At Facebook's FMC event in New York today the company introduced its highly anticipated "premium ads," which include mobile distribution. Mobile ads will not be separate from ads/content on the PC site; they will be an extension of the same campaign. There won't be a separate media buy or separate targeting (at least now).
New "premium ads" and existing "sponsored stories" will be distributed in Facebook's mobile apps as well as through its site on mobile browsers. These pieces of content or "ad units" will simply show up in users' mobile news feeds based on Likes and friend Likes, etc.
One of the company's ambitions is to remove complexity from advertising on Facebook. A Ben and Jerry's marketing executive is quoted in a promotional video saying, "We really don't have to worry about separate media." Accordingly the same brand post/story will thus appear in the "organic" feed, as a mobile ad or as a conventional Facebook Ad on the right rail.
Also earlier this week, Twitter revealed it's very similar plan for mobile advertising.
Promoted Tweets will now show up in users' feeds in mobile. Initially only those advertisers you follow will be allowed to promote tweets in your feed. However, over time, the program will expand to allow all advertisers to reach non-followers as well.
These two parallel programs may help one another and speed adoption (or at least testing) of mobile marketing by brands (and to a lesser degree small businesses). The widely discussed danger for both, however, is that mobile consumer-users might potentially feel spammed by brands and advertisers that are inept or too aggressive. This danger is greater for Facebook than Twitter.
Another potential issue is how all these new mobile impressions will impact mobile ad pricing. There's already an imbalance of supply and demand: too many mobile impressions chasing too few advertisers today. More competition generally equals lower prices for buyers. AdAge discusses that question in an article published on Monday.
The suggestion in the article is that like online, where social networks flooded the market with cheap display impressions, there's a similar potential risk in mobile. Prices are already coming down because there's too much supply: "That ad kitty will stretch even thinner when Facebook starts selling mobile advertising against its more than 425 million monthly active mobile users," speculated AdAge.
Facebook and Twitter ads are unique to those platforms, however. In effect these new mobile ads won't simply be fungible new impressions, interchangeable with those of a dozen other mobile networks. Facebook and Twitter compete more directly with each other than with Jumptap or Millennial or InMobi.
However it's quite possible that brands could choose to invest in Twitter and Facebook and divert resources (money, time, attention) away from other mobile display networks. Might that compel the other networks to lower prices to compete? Apple lowered prices considerably in response to competitive pressure on iAd from AdMob and others.
While the entry of Twitter and Facebook into mobile could push prices down for other ad networks, that outcome is not guaranteed of course. But we should know soon enough.
This morning Groupon and Deutsche Telekom announced a "strategic partnership" that will deliver Groupon deals to Deutsche Telekom customers throughout Europe. The deal is significant for both parties. Deutsche Telekom has a presence in 10 European countries.
According to the release:
The partnership marks the first time Groupon will partner with a multi-national service provider to distribute its products and services across a wide international network. It is also significantly enhances Deutsche Telekom's position as a leading provider of the latest applications for its customers.
Using a wide range of marketing and sales tools, varying from promotion activities to deeply integrating Groupon services in selected fixed and mobile services, Deutsche Telekom will offer Groupon services directly to its customers. Scheduled to be available in the first half of 2012 Deutsche Telekom mobile customers will enjoy Groupon's mobile services on their devices without the need for a separate download providing easy access to the best local deals in their area.
To those who dismiss Groupon as a business without a future, this deal is a powerful reminder of the strength of the Groupon brand and its near-global footprint.
The key to success will involve two things: deal coverage and execution. How much inventory is offered and how well presented are the deals?
Groupon Now, the company's mobile offering, in the US has so far not been a success. Accordingly that experience raises questions about how this might play out in a mobile context with Deutsche Telekom's subscribers. However it will not be limited to mobile.
By contrast UK carrier (Telefonica) O2's opt-in "O2 More" partnership with Placecast to deliver local coupons/deals has proven to be very successful. So there is a precedent that shows this could play out in a very successful way for both companies if well executed.
Very few people in the mobile industry are neutral about QR codes. People either love 'em or hate 'em and think they'll go away as soon as other (NFC, augmented reality) technologies take over. QR code boosters cite data that show scanning rates are increasing and promote successful case studies. Detractors cite surveys that show most people don't know what they are and generally ignore them.
AdAge covers Forrester data that argues "only 5% of Americans who own mobile phones actually used the 2-D barcodes in the three months ending July 2011 . . . and those 14 million early adopters tended to be young, affluent and male." Earlier comScore data confirmed this demographic profile:
More than half of all QR code scanners were between the ages of 18-34 (53.4 percent). Those between the age of 25-34, who accounted for 36.8 percent of QR code scanners, were twice as likely as the average mobile user to engage in this behavior, while 18-24 year olds were 36 percent more likely than average (index of 136) to scan. More than 1 of every 3 QR code scanners (36.1 percent) had a household income of at least $100,000, representing both the largest and most over-represented income segment among the scanning audience.
ComScore extrapolated from its survey that 14 million Americans had scanned a QR code. Most scanning occurred on traditional media ads or product packaging, though many had scanned QR codes online.
Last year marketing firm Russell Herder conducted a survey (n=500) that confirmed the demographic profile of QR code scanners presented above, and also that it was a minority use case. The majority of mobile users have not scanned one.
According to the survey almost 75% of respondents had seen QR codes. However a dramatically smaller percentage had actually scanned one.
Most significantly the actual experience of scanning a QR code was generally mixed. Respondents said that doing so only delivered value "sometimes" for most people (although 80% had a positive experience one could argue).
Beyond the "how-to" problem, most marketers in my experience aren't delivering a sufficient reason to scan codes. If all QR codes offered discounts, for example, many more people would scan them. But in most ads the reason to scan a code is unclear; only occasionally is there a specific QR call to action.
As a practical matter, for the time being at least, QR codes amount to a way to make a "tech-forward" branding statement and not much more. If marketers put more "meat" behind QR codes they could develop some staying power and become more mainstream. However if they're not used thoughtfully then they will be swept aside when NFC or some other "new, new" mobile marketing vehicle comes along.
I've argued in the past that Facebook would be compelled to monetize mobile once it went public. I envisioned that monetization taking the form of more-or-less straight ahead display ads that were targeted in some way. I also recently performed a very loose calculation of what Facebook's global mobile ad inventory might be worth (at a $2.50 CPM) and determined it could be up to $2.5 billion.
What Bloomberg reported yesterday, however, was that Facebook was considering launching mobile ads that were more integrated into the Facebook feed:
Facebook Inc. plans its first push into mobile advertising by the end of March, giving the company a fresh source of revenue ahead of a possible initial public offering . . . An idea being considered is putting Facebook’s Sponsored Stories ads, which feature friends’ interactions with brands, within the mobile News Feed, said the people, who declined to be identified because the plans aren’t public.
Sponsored Stories in the mobile news feed would be like "promoted Tweets" on Twitter in some respects. Sponsored stories allow advertisers to show Likes from people in your network (brands, products, stores) in the ad copy. They reportedly dramatically improve CTRs. Below is an example from Facebook online:
Earlier this week Nielsen reported that Facebook has the greatest "active reach" of any app across the Android OS (after the Android market). Facebook's most recent official mobile-user number is 350 million globally, out of more than 800 million total users.
My guess is that Facebook will be experimenting with various mobile advertising units/types before it launches anything officially. It already has a quasi-advertising vehicle in mobile "check-in offers." However Facebook itself currently doesn't make any money off these deals. Eventually that will probably change.
Nielsen has published data on the Android apps with the greatest "active reach" by age group (US market). Active reach means "percentage of Android owners who used the app within the past 30 days." After the Android Market app itself, Facebook is dominant across age categories.
After Facebook, Google occupies the next four slots with slight differences by segment. But basically it goes: GMail, Google Maps, Google Search and YouTube. In the top 100 free apps in the iTunes store, Facebook comes in at #24, Twitter at #48 and Google at #61.
In September here's what Nielsen said about overall active reach of Android apps:
Below is a chart (UK data from 12/10) that shows how dominant Facebook is in terms of time spent in aggregate minutes:
If Facebook wanted to turn on mobile advertising it would instantly become the largest "mobile ad network" on the planet. Indeed, I believe after the IPO Facebook will be all but compelled to run ads on its mobile apps and HTML site. But how much money might Facebook stand to gain from such a move?
A great deal is the short answer. Let's do some simple math to find out.
Facebook now has more than 1 trillion monthly page views on a global basis. In the US the number of monthly page views is 300 billion. According to an analysis by Hubspot in May, 2011 roughly 33% of Facebook's traffic was coming from mobile devices.
If that formula is correct, then approximately 99 billion of Facebook's monthly US page views come from mobile devices. This is mind boggling.
If we use a $2.50 mobile CPM ($2.50 per 1K impressions) to value this inventory it would mean that Facebook would be in a position to instantly add $247.5 million in US ad revenue to its coffers -- assuming 100% fill.
On a global basis, using the same crude formula, Facebook's inventory would be worth approximatley $2.5 billion, the annual mobile ads run rate that Google announced last week.
According to a survey by CloudTalk the mobile phone public prefers texting and browsing to real time "voice" conversations using their mobile devices. While the composition of the sample (and its size for that matter) are unclear, the survey respondents were very clear in their preferences. Nearly 90% said they prefer texting or "messaging" over voice conversation. In practice the numbers were slightly different as those sampled cited their overall usage of smartphones:
In order of priority, phone users reported:
By this measure, talking on the phone is on a par with "surfing the web," with under half the sample citing it as a priority. According to David Hayden, the chairman and CEO of CloudTalk (which provides a "platform" for multmodal and asynchronous mobile communications), this provides evidence of the evolution of mobile phone from an "intrusive" interruptor of everyday life into a more nuanced "communications tool."
There's something missing in this analysis. As Greg has cited in many other posts here at Internet2Go, we see mobile phones as far more than communications devices. By focusing solely on the communications capabilities, this survey misses the uses of the smartphone that are more like a wallet, with contact lists, calendar items and ultimately payment vehicles.
But their are insights to be gained by observing how readily the general public is adopting new modes of communications while at the same time recognizing that, in many cases, voice is the most appropriate way to communicate.