Are Facebook’s Mobile Revenue Problems SOLVED?
Facebook (NASDAQ:FB) is working on addressing worries that it doesn’t have a viable mobile advertising system, and said that it was creating a location-based mobile-advertising product allowing companies to target users with real-time data.
Facebook’s shares have fallen more than 20 percent since its IPO last month as analysts and investors express worries that the social network is far from figuring out the mobile platform at a time when more and more users access its website through those devices. Facebook has since been testing new ad products and also launched a new system that has mobile advertisements appear in the form of stories on a user’s news feed.
“Phones can be location-specific so you can start to imagine what the product evolution might look like over time, particularly for retailers,” Facebook’s vice president of global marketing solutions, Carolyn Everson, told Bloomberg. “We’ve had offers being tested over the last couple of months.”
Everson said the mobile-only news-feed ads concept had become popular with marketers.
According to Robert W. Baird analyst Colin Sebastian, incorporating a location-based element is the right way to go for Facebook. “The holy grail of advertising is finding people when they are at their closest point to making a purchase,” Sebastian told Bloomberg. “Having some location-based element to advertising can be very powerful, and if you combine that with all the personal data Facebook has, the potential is enormous.”
U.S. mobile-ad spending is expected to grow 80 percent to $2.61 billion this year from 2011, according to EMarketer. Mobile-ads accounted for 1 percent of all ad spending last year.
But Facebook will have to careful, with regulators already asking questions about the social network’s practice to allow companies to serve ads based on ZIP code and allowing users to share a physical location.
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