The Facebook IPO document‘s section entitled ‘Risk Factors’ discusses a number of uncertainties that might adversely affect their operations and financial conditions and one of the foremost is that Facebook is increasingly being used by consumers on a mobile platform but they aren’t making enough money from it. Directly stated in the document :
“Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results.”
So, rumours of mobile ads being introduced should come as no surprise.
The Financial Times reported recently that advertisements on mobile platforms are expected to begin showing as early as March, before the IPO goes public. Sources familiar with Facebook suggest that they are already in talks with various advertisers to introduce ‘featured stories’ which will display in the users’ news feeds on the mobile site. Brands will be able to pay to have users’ interactions with them on the brand pages highlighted as ‘sponsored stories’.
Twitter has already done something similar with the ‘promoted tweets’ which show up in users’ timelines like regular tweets. The feature is being rolled out slowly and is not visible to all users yet. Twitter has faced a certain amount of backlash and it is likely that Facebook will too, as most people feel that the mobile platform is too small to take ads.
Here Facebook begins the journey of trying to balance the interests of its 845 million users, with its shareholders who expect rapid revenue growth.
Several new features for brands are expected to be unveiled on February 29 in New York, where Facebook is holding a conference for marketers, as it tries to encourage brands that are currently using Facebook for free, to switch to paid promotions.
Do you think mobile advertisements will be successful? How will your brand capitalise on this opportunity? Share with us.