Will Facebook’s New Look Increase Mobile Advertising Revenue?

In what appears to be a move to further monetize their news feed users, Facebook (NASDAQ:FB) has sent out press invitations for an event promoting the launch of a “new look for News Feed” to be held March 7 at 1 PM EST. Although it isn’t clear how many changes will be made to desktop version of the News Feed versus the mobile version, Facebook would be wise to focus its revamping efforts on the mobile app, since monthly active mobile users increased 57 percent in the fourth quarter, surpassing web daily active users for the first time, according to Forbes.

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Although Facebook has made behind-the-scenes changes to its mobile apps that improve loading times, this will be the first major aesthetic overhaul to the Facebook mobile app since May of 2012. One step to monetizing mobile usage at a higher level is going to be prudent use of the limited screen space that mobile devices offer, without alienating users with obnoxiously large advertisements that are better suited to a desktop browser. News Feed has done a capable job of creating ad revenue without disengaging users so far, and as CEO Mark Zuckerberg noted in January’s earnings call, “as we roll out ads to news feed, we found that it barely affected the level of engagement on Facebook.”

A reworked News Feed app for mobile devices may be the next key to unlocking Facebook’s full mobile advertising potential. As CEO Zuckerberg stated in the last quarterly earnings call, Facebook “ended up with approximately 23% of our ads revenue coming from mobile in the fourth quarter.”

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