Facebook testing mobile ads on third-party iOS, Android apps
Facebook (NASDAQ:FB) is trialing mobile advertisements across selected third-party iOS and Android applications, the latest step in the social network's efforts to monetize its mobile services.
Facebook is rolling out banner and interstitial ads that direct consumers to mobile websites or app stores based on the user's profile and social media activities. According to TechCrunch, Facebook is syncing its anonymous user IDs with several mobile ad exchanges--when a Facebook user visits an app or site where an exchange partner has placements, the exchange instantly transmits the user ID back to Facebook to determine whether an advertiser has bid on inventory targeting the consumer's particular demographic profile. If so, Facebook pays the ad exchange some portion of the bid, and the ad is 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 in an emailed statement. The company said the mobile ad rollout represents a "small test" and declined to identify which or how many advertisers and publishers are participating in the trial. Facebook also declined to respond to questions whether the trial is a precursor to a full-fledged mobile ad network.
Last month, Facebook 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. The service is currently in beta trials. The Wall Street Journal, which first reported on the mobile ad effort in July, 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 is on pace to generate close to $73 million in mobile ad revenues this year--about 2.8 percent of the U.S. mobile ad market--according to research firm eMarketer. Google (NASDAQ:GOOG) currently dominates the segment, controlling 55 percent of the U.S. market.
Facebook reported net losses of $157 million in the quarter ending June 30, its first as a public company, and 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.
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