Take Two: Facebook Takes Another Look At Its Mobile Ad Network

FBFacebook is once again experimenting with a mobile ad network that would place ads on non-Facebook mobile apps and sites based on the social network’s data, the company confirmed. Business Insider first reported the news.

"We're currently running a second test to show Facebook ads off Facebook in mobile apps and on mobile sites. Our goal is to improve both targeting and relevancy of the ads people see. Since this is a test, we don't have additional details to share,” according to a statement the company released.

The first time Facebook experimented with advertising outside its properties was in June 2012 when it ran Sponsored Stories on Zynga.com. The company began testing its mobile ad network in September last year but halted its efforts three months later.

One of the reasons Facebook is continuing with its tests could be attributed to advancements they’ve made in their targeting technology, suggested Ray Wang, founder and principal analyst at Constellation Research. “Facebook has to figure out how many ads customers can take before they’ll get turned off.  And [since the last test] they’ve improved their ability to make their ads more relevant so this is another opportunity to see if they’ve gotten it right yet.”

Jason Pope, VP of AOD Mobile at VivaKi, agrees. “The data points that Facebook was first using for its ads were fairly basic,” he said. “They needed to make more data signals available beyond things like gender and zip code and I have a feeling they’ve been working on that algorithm and are ready to continue testing it.”

As for the timing of the news, Pope noted “Twitter’s news could have also provided a sense of urgency to move faster.”

Agencies, Pope added are excited at the prospect of Facebook launching a mobile ad network. “Facebook is one of the few publishers that has really excellent first-party data, including not only registration data but also behavioral data,” he noted. “Twitter also has a lot of great social signals that can be aggregated but Facebook has a little more depth into the demographic info. What will be interesting is if Facebook follows Twitter’s footsteps and buys an ad network to bring them even closer to the inventory. That would be a whole new business for them.”

Brands can advertise on Facebook by paying to run ads on the social network using Facebook's targeting data or through its ad exchange, FBX, which uses cookies from other web sites to target users entering the site.  Facebook currently receives about $656 million per quarter from mobile ads that appear on its own site and mobile app.

Facebook is expected to capture 15.8% of global mobile ad revenue this year, up from 5.4% in 2012, according to eMarketer. A mobile ad network could give the Menlo Park company a gigantic stream of new revenue by opening it up to the mobile web and app ecosystem.

Google of course remains on top and is forecast to take 53.2% of the market this year, up from 52.4% in 2012.

News about Facebook’s tests follows on the heels of Twitter's recent efforts to boost its own mobile ad-serving and targeting capabilities. Twitter recently acquired the mobile ad server and real-time bidding exchange provider MoPub for $350 million. Once the acquisition is complete, Twitter will have access to non-Twitter mobile properties. Twitter is expected to combine its extensive user data with MoPub’s ad serving capabilities to better target customers on apps and websites. Twitter is also preparing to go public, reportedly before Thanksgiving, according to Reuters, and is looking to raise $1 billion in its public offering.

 

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