As more people spend more time on their mobile phones, Facebook Inc. wants to position itself as the company that sells mobile advertising – and not just on its own service.
On Wednesday at Facebook's F8 conference for developers in San Francisco, the company announced the launch of a mobile advertising network called the Facebook Audience Network, which it has already begun testing. The network will allow Facebook to sell ads in other mobile apps and games. The company says it will give developers better access to advertisers, as well as to the kind of customer data about Facebook's 1.28 billion active monthly users that Facebook already uses to sell its own ads.
"This is really the first time that we're going to help you monetize in a serious way on mobile," chief executive officer Mark Zuckerberg told the audience in San Francisco.
The move is important for Facebook because it gives the world's largest social network a way to sell more ads on the fast-growing mobile platform without introducing more advertising clutter into its own mobile service. For the app developers, it offers the chance to share a cut of their ad revenue in order to better connect with major advertisers looking to target specific audiences – something Facebook can manage more effectively with its data, and its access to more than one million advertisers with whom it already does business.
For example, when the audiobook service Audible wanted to find fans of the HBO show Game of Thrones to target with audiobooks from that series, Facebook was able to tell them that there were many Game of Thrones lovers who happen to play the mobile game "Cut the Rope," and to sell Audible advertising within that game – outside of Facebook.
"You don't have to go out there as a publisher and developer and hire a giant sales team … you don't have to parse your audience," Facebook's director of platform management and product monetization, Deborah Liu, said on Wednesday.
The growth of mobile has been a huge story for Facebook, as it has for many advertisers. Within just a couple of years, Facebook went from making no money on mobile ads to doing the majority of its business on mobile. Last year was the crossover point from making most of its money from desktop; now 59 per cent of revenues are from mobile.
On a conference call to discuss its first-quarter earnings last week, chief operating officer Sheryl Sandberg spoke about the "very early testing" of a mobile ad network.
"We do see a big opportunity, here," Ms. Sandberg said. "We think because we are people-based we have an opportunity both to provide greater reach for marketers and developers who are working with Facebook across other platforms, but also improve the relevance of the ads people see, both on and off Facebook.
She said the company does not expect "meaningful contributions" from test projects such as these this year.
But with the growth of mobile, it is an important strategy for Facebook to seek out a bigger slice of the advertising market in the future.