Advertising on the Go: Facebook & Mobile Ad revenue

In the United States alone, companies spent close to US $4 billion dollars on mobile advertising. Many experts believe that by the virtue of being delivered on our cellphones – an object most of us consider personal – mobile advertising is an intimate way of reaching out to consumers. While banners ads and SMS text ads are equally common, the latter, because they’re usually chosen by customers, perform better.
Mobile Search, of course, is the next big thing in search. Almost everybody who can use search on mobile is doing so. Despite this, target advertising is still rare in the mobile marketing world. So it’s not, by nature, interactive and mostly relies on text and banner ads. However, experts, like ABI Research practice director Neil Strother, believes that the future of mobile advertising is going to be much more focus and target specific. Right now, interactive ads are expensive and may not even be reaching the right consumer; certainly, a huge risk for marketers in the current economic environment.
Mobile ads need focus
Temporal and Spatial information is a valuable source for marketers. It helps them get to understand the consumer better, many times over. Tapping into this to create more effective mobile advertising will boost mobile advertising revenues. Strother predicts a future mobile social, in the form of a personal cloud, where social sharing and purchase could be done right from the device in one’s hand.
In recent years, mobile phone, by nature of its affordability and portability, has become one of the most widely used media device. Interestingly, it is also one of the least used media by marketers. Consider these figures: Mobile phone receives just 1% of the global marketing budget, despite the fact, that the total number of mobile phones in the world, are three times more than TV sets and 4 times over internet-based Personal Computers. Despite the fact that mobile isn’t as targeted, and interactive, as the other mediums, the sheer rate of return on investment is fabulous. The median CTR for Text Messaging is 14.06%, where as the median conversion rate is 8.22%; both rates many times higher than TV and Internet.
It sure gets attention
Because mobile advertising is an opt-in, where subscribers choose what they wish to receive, businesses can customize and offer real-time solutions and offers. For instance, a comforting Asian massage could be followed up by a lovely sushi meal. And indeed, more and more users would be open and available to receive this information on their mobiles, as it is believed that the average adult in the United States is spending more time on his mobile phone, as compared to the newspaper or magazine.
With the IPO just around the corner, Facebook needs to find ways to up its revenue. Given all that we have heard of mobile advertising, there’s one stream of revenue just waiting to be cashed by Zuckerberg and co. The company claims that out of its 800 million users, about 300 million use the social networking site on their phones. That’s one helluva revenue base just waiting to be tapped through mobile media.
 Going Facebook mobile
Nobody knows yet, how Facebook mobile will integrate advertising with it. It’s quite likely, of course, that the current PC formats, which may be highly customized, but are relatively non-obtrusive, could be adapted to Facebook mobile. Another possibility maybe sponsored stories that appear in the mobile news feed. For instance, actions like check-ins, posts, writing on the wall, could turn into sponsored stories.
Given Facebook’s huge edge in terms of what it can offer mobile marketers, i.e. customer information, users may indeed soon see Facebook advertising on mobile. Marketers could tap into the temporal and spatial variable advantage that Facebook offers and create ads that are better targeted. Facebook friendships could also be used to influence mobile advertising in some way. For instance, friends could ‘like’ a brand or offer real-time opinion, while a friend is at a store. Again, this works against marketers. But the advantages of mobile advertising outweigh its disadvantages for marketers.
Late-comer disadvantage?
While it may seem like the right time for Facebook to enter into the mobile advertising market, many may think the new-age companies rather late embrace of the new technology may be off. However, there are a number of reasons why Facebook may have chosen to hold off on mobile advertising.
One of the reasons, according to Dan Frommer of Business Insider, is that Facebook was originally conceived and later marketed and expanded as a desktop device. The mobile access was a mere convenience. However, given that there are 95 million monthly active users, it is a pleasant surprise for Facebook and now they’re going to use the handheld popularity to their advantage.
According to Frommer, Facebook must now make the site increasingly relevant and just as much popular on mobile devices, as it is on the computer. Navigating between the two media, should be a comfortable experience for users. This ease will help Facebook retain its leadership in social networking, even if the preference for the medium of access changes. It may be easy for experts such as Frommer to say, and while this may be valid, it is not as easy for Facebook itself to adapt to an entirely new medium so easily. Despite the figures of users staring them in their face and extra revenues seemingly so close, they must have chosen to remain focus on their core medium. Although, it is now time to adapt and change.
It’s all about the user
Mobile advertising on Facebook, like Facebook itself would be led by the user. The user will have to voluntarily talk about a product. For instance, at an apple store, a user has seen a new ipad and has posted the picture on his wall. This takes the brand, marketing and mobile advertising to the next level. Thus Apple is reaching consumers who are actually likely to appreciate and buy the iPad and Facebook gets paid for it. While users get to share information about products that they like.
At this point, Facebook’s web partners are Coke, Levi’s Playfish, among many others. It has also tied up with non-profits, such as Amnesty, UNICEF and so on. In fact, many brands can tie-up with non-profits and increase their profile on Facebook. For instance, IKEA has been trying to get Facebook users into its store by advertising that every Facebook friend invited to the IKEA store would be leading to a donation of $1 to Save the Children. This can easily translate to a Facebook mobile campaign!
As a late entrant, Facebook has some serious competition. Google’s Admob, Millenial Media’s Ad network and Apples’s iAd are all potential competitors. In fact, Google gets the biggest share of the mobile revenue pie in the US – about 24% of the $630 million in mobile advertising goes to the Google treasury. But then, Facebook has shown potential for exponential growth on the Web, it may just do them in mobile ad revenue.

Facebook Commerce Holds Promise for Retailers

Social networks don’t account for much ecommerce yet, but heavy Facebook users see it as a one-stop shop

Social media and ecommerce have evolved since 1-800-FLOWERS launched the first Facebook storefront in July 2009. Internet users have become more comfortable with online buying on Facebook as they spend more time on the site.

“It is not surprising that shopping and socializing—activities that complement each other in the real world—are beginning to converge online as well,” said Krista Garcia, eMarketer analyst and author of the new report, “Facebook Commerce: Reaching Shoppers Where They Socialize.” “As social media, and Facebook in particular, plays a larger role in consumers’ lives, people are becoming accustomed to performing routine tasks like reading news, watching videos and listening to music, as well as discovering products and shopping, all while staying logged in to a single site. Instead of compartmentalizing daily routines, social media users are treating Facebook as a one-stop platform.”

Retailers are still in the early stages of using social media as a sales vehicle, but the channel is poised for growth. Booz & Company estimated that $1 billion in goods would be sold through social media in the US in 2011. That figure is expected to triple in 2012 and reach $14 billion by 2015.

While social commerce still represents a tiny percentage of overall retail sales, and Facebook is just one social site, that site is the clear leader and already offers retailers a variety of options for converting users into consumers. Some of those consumers are warming to the idea of buying products and services while on the site.

In a Q4 2011 Oracle survey of North American internet users, nearly one in five respondents said they would buy through Facebook or had already done so, while 15% were not aware they had the option. Approximately a third said they would never purchase products via Facebook, however.

“Facebook’s role in ecommerce is currently in flux,” said Garcia. “Brands are beginning to realize its capabilities, while users are growing accustomed to mingling with companies online and sharing shopping activities with friends. Even though social media is still more of a marketing tool than a sales vehicle, Facebook’s influence on shopping behavior extends beyond triggering conversions on the spot.”

Source: emarketer.com


Facebook Marketing: 8 Tried & True Tips For Businesses

Tip #1: Pages not Profiles
This first tip is pretty important. If your business has a Profile instead of a Page, then you won’t be able to utilize most of the other tips we’ll be sharing. Pages have several advantages for businesses over Profiles, including…
Tip #2: Promote Your Page Offline
If you build it, they will not come. You need to let people know about it. First, go to facebook.com/usernameand secure a vanity URL for your Facebook page. Then, put that URL everywhere…
Tip #3: Use Facebook Ads
Creating an ad for your Facebook Page is an easy 5 step process – design it, target it, set budget, review it and pay. Use Facebook Ad Insights to test and determine the copy and images that get the highest click through rates…
Tip #4: Custom Tabs
Adding a custom tab to your Facebook Page can be an effective way to help your Page stand out from the crowd, promote exclusive “fan-only” deals, showcase a new product or simply welcome new visitors with a branded splash page…
Tip #5: Offers, Discounts & Deals
Facebook fans want discounts. In fact, it’s the number one reason they’ll “Like” a Facebook page. I discussed this in more detail in a March 2010 post called Hook A Facebook Fan Up: They’re Looking For Discounts…
Tip #6: Profile Image Billboards
The profile image on your brand’s Facebook Page is valuable real estate. Take advantage of that. Whether it’s a Facebook contest you’re hosting or an off-Facebook marketing effort you want to make your Facebook fans aware of, turn your profile image into a “billboard” display…
Tip #7: Facebook Video
Video can be a great part of an online marketing mix. Many people upload and share YouTube videos, but there are also advantages to Facebook Video as well…
Tip #8: Wildfire Contests
Facebook contests can be a great way to generate buzz, interest and excitement around your brand. Hosting a contest on your Facebook page is also an effective way to build awareness of your page and boost fan numbers…

Source:  Chad Richards