SAN FRANCISCO – Get ready for advertising to hit the mobile version of Facebook in early March as the company looks to generate more revenue leading up to its forthcoming initial public offering, according to an online report.
Nearly half of the social network’s 845 million monthly active users log onto Facebook from a mobile device. But Facebook last Wednesday said in its IPO filing that it isn’t making any “meaningful revenue” from its mobile apps or the mobile version of its site. Facebook’s dearth of mobile advertising appears about to change, however, according to the Financial Times.
The first round of ads to hit Facebook on your smartphone and tablet will reportedly be Sponsored Stories, which launched on the desktop version of Facebook in early 2011. Sponsored stories let advertisers pay Facebook to notify you if a friend reports some action that implies endorsement of a product, such as liking Coca-Cola’s brand page, checking in at a retail store, or making plans to visit a local restaurant. Sponsored stories started on the right hand side of your Facebook home page, but the company in December said Sponsored Stories will make the jump to your regular News Feed.
Sponsored Stories will reportedly make another move onto your mobile devices by March, according to the FT. Facebook also hinted in its IPO filing that it is considering such a move. “We believe that we may have potential future monetization opportunities [for Facebook mobile products] such as the inclusion of sponsored stories in users’ mobile News Feeds,” the company says.
When reached for comment by PCWorld, Facebook declined to discuss the FT’s report.
But will users tolerate social ads while on the go? Mobile devices have far less screen real estate than a desktop computer, so sponsored stories are sure to take up more space when they scroll by on your 3.5-inch iPhone screen or even the 5.3-inch display on the new Samsung Galaxy Note.
Beware The Dickbar
The challenge for the world’s largest social network will be to ensure its mobile ads aren’t too intrusive for its users while still being a useful channel for advertisers. Twitter tried to extract revenue by pasting sponsored ads into its mobile product in early March 2011 with its “Quick Bar,” a persistent strip of text that displayed a promoted Twitter topic whenever you refreshed your tweet stream. The concept so annoyed users it quickly became known as the “Dickbar,” and Twitter killed the concept soon after.
So far, Facebook has avoided Quick Bar-like user outrage on the desktop version of Sponsored Stories; partly because the stories look like any other newsfeed item except they have a “Sponsored” tag at the bottom of the post. Mobile versions would also likely blend in with the rest of Facebook.
Whether or not Sponsored Stories on mobile devices pay off, you can bet Facebook will be trying other ways to make money off your smartphone in the coming months. A recent report by market research firm Canalys says that in 2011 smartphone shipments overtook those of PCs for the first time. And, as The New York Times points out, mobile phones are more popular than PCs for getting online in emerging markets such as Chile, Venezuela, and Brazil. With such a large and growing mobile audience and profit-hungry investors soon to be watching the company’s bottom line, Facebook can no longer afford to offer ad-free mobile apps. Especially when it will soon have a lot of new stockholders to satisfy.