Facebook trials mobile ads in iOS, Android apps
Facebook is rolling out a new mobile advertising unit designed to drive iOS and Android application installations, the latest step in the social network's efforts to monetize its mobile services.
The Facebook mobile ad units target 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. The service is currently in beta trials.
"Facebook has increasingly become a way for iOS and Android developers to grow their apps," said Facebook software engineer Vijaye Raji. "In the past 30 days, we have sent people to the Apple (NASDAQ:AAPL) App Store and Google (NASDAQ:GOOG) Play 146 million times, via clicks from channels such as news feed, timeline, bookmarks and App Center. Mobile ads are an additional way to drive people to apps. When a person clicks on one of these ads, if they do not have the app installed they will be sent to the App Store or Google Play to get it."
The Wall Street Journal, which first reported on the mobile ad effort last month, notes Facebook will initially bill developers on a cost-per-click basis, but eventually plans to charge them each time their app is downloaded.
Facebook reported net losses of $157 million in the quarter ending June 30, its first as a public company, but it has vowed to right the ship with the introduction of new and improved mobile social networking experiences. Facebook now boasts 955 million monthly active users worldwide, and 59 percent of that audience accesses the platform via mobile device. In addition, the number of Facebook users who accessed the site exclusively via mobile device increased to 102 million in the second quarter, a 23 percent quarter-over-quarter leap. That means close to 20 percent of all Facebook mobile users never even access its desktop site and never see the ads displayed there, underscoring the importance of the company's mobile ad initiatives.
"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 and that the usage through personal computers may continue to decline in certain markets, in part due to our focus on developing mobile products to encourage mobile usage of Facebook," the company's recent 10-Q Securities and Exchange Commission states. "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."
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