The Facebook mobile ad revolution has started

Posted by: Jamie O’Brien, Social Editor

A few days ago, we speculated on the possibilities of Facebook’s mobile ad platform. Facebook took the wrapper off its mobile ad network, FAN, at its F8 Developer Conference yesterday, announcing that it will serve standard banners as well as native ads, which should appeal to developers who want to integrate social context and targeting options that only Facebook can offer.

FAN has been designed to replace the incumbent mobile ad platforms as quickly as possible. When apps are using FAN to serve their ads, it can add full social context and relevant targeting options which were previously unavailable. I’d like to take a look at some of the bigger developments.

A new breed of native ad
Techcrunch reports that Facebook will offer “custom ad units tailored to fit the apps they’re hosted in. A navigation app could show ‘promoted locations’ pins that are ads for nearby restaurants or businesses. A lock-screen or home-screen replacement for Android could show ‘suggested apps’ that are essentially app install ads.”

These Facebook feature-based ads move native ads beyond what we’ve seen before. Apps can monetise with standard banners, but if Facebook can build a suite of native ads, then new apps and OS skins can be built around these systems.

The framework of ‘make it popular, then monetise’—which often leads to disgruntled users—could be replaced with assessing the data to see which combinations of app and native ad set-up are generating profit, building apps around that set-up, then generating revenue from the outset—removing the awkward stage where advertising is shoehorned in.

Targeting
Targeting—especially retargeting—has its troubles. The problems stem from something like a single search for flights to Mexico leading to six weeks of ads about Mexico, when the flights and hotel are already booked. All the ad server knows is that you searched for flights to Mexico and it has ad inventory linked to Mexico. Even if it has shown you the ad 58 times, it will keep showing it to you because that’s all it has: you and Mexico, forever.

Facebook could change this. A deeper understanding of a user’s likes and behaviour should lead to a better experience. Facebook caps exposures on its platform and it will more than likely attempt to manage the exposure and improve the experience of its users wherever they are.

The relevance of the ads a user sees will be directly linked to the quality of their Facebook profile. With the launch of FAN, it becomes more important to have a rich and accurate profile, if only to improve the relevancy of ads. We can think of Facebook as a universal ad preference system—just tick the boxes for the things you like. If someone genuinely likes and enjoys Burger King, isn’t it better that they see ads for its latest creation rather than for perfect abs?

Social context
FAN has plenty for advertisers to get enthusiastic about, but we have to talk about the fans too. Facebook will inevitably include more of its social options in its off-Facebook ad inventory, such as social context—telling people which of their Facebook friends like or use a brand’s products in the ad. There was a huge fuss about this when Facebook first started experimenting with ads, but now times have changed. People are used to social context and it improves the performance of ads.

Combining FAN ads with apps that use Facebook sign-in will open up new advertising territory. If a user plays Zynga’s Words With Friends Free and has it linked to their Facebook account, the ads can become social ads that have access to a user’s friend’s data too. So if that user has two Facebook friends that also play Words, as well as another game that the original user doesn’t play, we could show ads for the new game featuring those friends and their activity. The call to action could even be ‘Start a game with David now’—automatically installing the app and starting a new game in one click. 

The same type of ads could work for tracks your friends have listened to on Spotify, or any other app that has Facebook integration and shares its information on the Facebook News Feed.

Powerful
Simple app install ads are working well, but this kind of Facebook integration would no doubt destroy those numbers. Too much personalisation out of context can be creepy and off putting, but used in this way it would be a very powerful advertising tool.

Jamie O’Brien
Social Editor, TBG

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