Facebook Must Work on Monetizing Mobile

Directly due to its mobile shortcomings, Facebook just amended its public offering prospectus to show that it is seeing fewer ads per user.

“In March 2012, we began to include sponsored stories in users’ mobile News Feeds,” the new prospectus explains. “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.”

“Mobile is clearly a huge challenge for Facebook, and something the company sees as its future,” writes The New York Times’ Bits blog. “But it has also acknowledged the difficulties it may face while trying to build a meaningful advertising business on smartphones.”

Facebook also warned that if users continued to increase their mobile usage -- at the expense of PC time -- and if it is “unable to successfully implement monetization strategies for our mobile users,” the company’s revenue growth will likely be harmed.

“As we noted when Facebook originally filed, it hasn’t proven its ability to monetize mobile yet,” writes TechCrunch. “It now has Sponsored Stories ads running in the mobile news feed, but it can’t show nearly as many ads in this format as it does on the web, where it often shows four to seven ads per page, though less prominently in the sidebar.”

Explains VatorNews: “Facebook has looked at the news feed to inject its paid advertisements rather than banner or side-bar ads but finding the right combination and testing it has not been as quick of a process as some may wish.”

Meanwhile, “Getting serious about mobile was one of the major drivers behind Facebook's $1-billion play to buy mobile photo-sharing app Instagram,” according to The Los Angeles Times.

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1 comment about "Facebook Must Work on Monetizing Mobile".
  1. David Engel from Mobile+Positive , May 10, 2012 at 12:50 p.m.
    I was in the grocery store the other day and more than half of the people were holding mobile phones. I stopped to ask one person what she was doing, and she said she was on Facebook. Does Facebook know how valuable it would be for a CPG company like P&G to show a rich media ad -- or even a sponsored story -- to people inside a grocery store in Facebook?