Facebook halts mobile ad trials in third-party iOS, Android apps

Three months after Facebook (NASDAQ:FB) began trialing mobile advertisements across selected third-party iOS and Android applications, the social networking giant is slamming the brakes on the initiative.

"While the results we have seen and the feedback from partners has been positive, our focus is on scaling ads in mobile news feed before ads off of Facebook," a Facebook spokesperson told Mashable. "We have learned a lot from this test that will be useful in the future."

Sources told All Things D that Facebook also has halted plans to run ads across publisher partners' mobile sites, explaining that publishers remain concerned that Facebook is not yet ready to deliver external mobile ads capable of generating significant value for the social network or its partners. That belief is driven at least in part by the relatively low rates Facebook commands for ads across its own platform. One publisher said that while rival ad networks like Google (NASDAQ:GOOG) have gained traction by offering publishers a guaranteed revenue threshold regardless of ad performance, Facebook has not yet proposed similar terms, instead discussing a "generous" revenue split.

In mid-September, Facebook began testing in-app banner and interstitial ads directing consumers to mobile sites or app stores based on the user's profile and social media activities. Reports indicated Facebook synced its anonymous user IDs with several mobile ad exchanges--when a Facebook user visited an app or site where an exchange partner has placements, the exchange instantly transmitted the user ID back to Facebook to determine whether an advertiser had bid on inventory targeting the consumer's particular demographic profile. If so, Facebook paid the ad exchange some portion of the bid, and the ad was displayed to the user.

"Showing mobile ads outside of Facebook is another great way for people to see relevant ads and discover new apps," Facebook said at that time, noting the mobile ad rollout represented a "small test" and declining to identify which or how many advertisers and publishers were participating in the trial. Facebook also declined to respond to questions regarding whether the trial was intended as a precursor to a full-fledged mobile ad network.

In recent months, Facebook has also introduced new mobile ad units designed to drive iOS and Android app installs by targeting consumers based on the apps and games they already access on their smartphones. Developers select their intended audience demographic, budget and method of payment, and Facebook inserts ads for their apps directly into targeted users' mobile news feeds. Earlier this week, Facebook overhauled the program on iOS, enabling iOS 6 device users to initiate downloads directly from Apple's (NASDAQ:AAPL) App Store by clicking a dialog box, avoiding disruptions to the Facebook experience.

Facebook now touts more than 1 billion users worldwide, with roughly 600 million accessing its services via mobile. As of the third quarter of 2012, mobile initiatives generate 14 percent of the company's total advertising revenues.

For more:
- read this Mashable article
- read this All Things D article

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