Facebook’s Mobile Ad Aversion

Facebook is the biggest fish in the mobile sea — It attracts a whopping 350 million users a month — but the company isn’t even considering including ads on it mobile properties, a fact that points to the shortcomings of the current mobile ad system.

The company yesterday unveiled its long-awaited iPad app and extended its application environment, the Facebook Platform, to mobile devices. Developers will now have the opportunity to tie their mobile apps to the social network, as they’ve been able to in the desktop environment for some time. Those additions will inevitably drive further audience growth and engagement from non-desktop devices, seemingly building on the contention earlier this month from Facebook mobile chief Erick Tseng that the social network gaint considers itself “a mobile company.”

But it doesn’t consider itself a mobile ad company — at least not yet. A spokesperson for the social network said yesterday that it still has no plans to serve up ads to either mobile or tablet users, despite the massive opportunity to do so.

Beyond its huge audience, there are obvious opportunities there. The creative opportunities afforded by the iPad, along with Facebook’s massive store of user data that would obviate mobile ad-targeting problems, would undoubtedly provide a mouthwatering prospect for advertisers.  Likewise, its Places database coupled with smartphone GPS technology could present some intriguing opportunities for location-based ads.

For now, though, it’s all could and would when talking about Facebook and mobile ads.

Facebook CEO Mark Zuckerberg seems skeptical of mobile ads, though, emphasizing user experience over monetization. “We just need to see what makes sense for mobile advertising. But in the short term there’s no pressing need for us to monetize that immediately,” he told Reuters late last year, adding, “Our goal is going to expand [our audience] and deliver more value for more people before focusing on how we can reap that.”

One year on the message from Facebook’s global vp of marketing solutions, Caroyln Everson, is a similar one. “I don’t rule mobile out, but we are working hard to figure out what the right model is. We haven’t figured that out yet,” she told a PaidContent Advertising conference late last month.

That’s a massive amount of prime inventory on the sideline. For all the growth forecasts rolled for mobile advertising — EMarketer predicts mobile ad spending will finally top $1 billion this year — it would be as if Google wasn’t a part of the Internet ad system.

Ultimately, though, it’s only a matter of time before the company feels increased pressure to attempt to extract revenue from mobile as its user base migrates there. In February the firm said 40 percent of its active users accessed the network through mobile devices. Yesterday it said that portion is closer to 45 percent, pointing to users’ continued migration from laptops and desktops to tablets and other mobile hardware.

What’s clear is Facebook, and perhaps Zuckerberg personally, is not happy with the current mobile ad products, which are mostly banners, buttons and screen takeovers. Even Apple’s iAds have been a mild a disappointment. Facebook will likely try something wholly different, more social and more custom. And with a booming desktop ad business, it can afford to wait. That’s the advantage to being the biggest fish in the sea.


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