Blog Post

Can Facebook Become the Google of Mobile?


Facebook announced at their F8 Developer Conference a new mobile advertising platform that would allow advertisers to reach across mobile services through Facebook's mobile ad platform. Google also announced powerful tools for mobile advertising weeks prior with Google AdWords. With Facebook mobile ads platform potentially carving into Google's ad space, it raises the question: Can they do it? Watch today's Daily Brown Bag to learn about Facebook's mobile ad offering, their advertising market share, and the concerns that arise.

Also available on YouTube.

TRANSCRIPTION:

Hello and welcome to the Daily Brown Bag. Today we're going to be answering the question of whether Facebook can be the next Google of mobile. I'm Chad Hill and I'm joined by Adam Stetzer.

Hey, good afternoon Chad. Welcome to the Brown Bag. So Facebook is trying to carve out its place in mobile and we've got some interesting stats to kick off the discussion Chad about what it potentially really is and whether Facebook can become the Google of mobile.

Facebook mobile ads market share

There are currently 1.3 billion monthly active users on Facebook and 600 million of them are active via mobile. So that's pretty high penetration.

There are over 1 million advertisers currently on the platform and nearly 60% of Facebook's revenue comes from mobile ads, also a key statistic with year over year growth of over 61% from mobile users on the platform. So that's the backdrop here Chad so what's the discussion today?

Facebook's vast amount of targeting information

Yeah. I think this is in some ways something that Facebook mobile ads really has always had, a much better insight into all that information about customers, what they like and don't like and Forster has coined this sort of idea of this infinite amount of targeting information as the database of infinity. So this sounds, Adam, like a good topic for another Brown Bag, but for today what we really want to talk about is how all this great information that Facebook has been trying to figure out whether how they can get people to advertise on Facebook mobile ads platform when people really are there to talk to their friends and see what other people are doing.

Facebook wants to live outside of Facebook

But what we're hearing here and seeing here is that for the first time how Facebook really wants to use that data to actually let people target ads outside of Facebook mobile ads platform, whether that's on a mobile device and maybe down the road, even back on just the regular old desktop browser. So some pretty exciting stuff here and I do think Adam, it seems like all that information people are sharing with the right amount of crunching and analysis really could lead to some insights that you can't get just from browser intent or other ways of targeting people today.

What is Facebook trying to do?

Well, yeah and I feel like we've been talking about this for five or six years Chad that the goal that Facebook is setting on us is really astronomical and you think about some of the ways that they can do that, so they can target people across apps based on what you've shared in Facebook. So a brand can advertise even a third party apps based on some of this data and just the level of targeting and as you said, you're there for other reasons, social reasons but you're surrendering a certain amount of data on that social graph that they understand very, very well and can understand a fair amount about you and then choose to show ads.

Becoming the Google of mobile

We've done some primary research on this ourselves Chad right, the certain types of advertisements that people actually find helpful and don't even remember it necessarily as advertising thinking back to some of our surveys we've done of consumers over the last few months. So Facebook, yeah I think they are positioned to perhaps become the Google of mobile if they don't mess it up and they're so large and so embedded. It seems like they probably won't but I'd be interested in your take on that.

The issue of privacy

Yeah. Well, I think there really is maybe a line in which we're approaching here and I know that just recently on the political side of things is that Obama actually came out and was talking about how, along with NSA regulations, they might want to look back at some of the data that private companies are gathering. So it is certainly interesting, there is a treasure trove of information. It's probably scary what really smart people can do with all that information.

Certainly from an advertising standpoint, probably not going to hurt me too bad but I do think Adam that the time has been sort of coming for a long time but you have to think the tools are getting better and we are getting closer to some pretty powerful targeting opportunities here.

And you raised some interesting points in the privacy side and we've discussed those as well and we know Facebook is struggling with the key younger demographic which is very tuned in to those things that you're saying, saying I don't want this on my code permanent internet record and we see actually usage dropping in some of those lower age brackets and we've seen some conditions and we've discussed Snapchat and some of these places the younger users are going.

So you're right, there are some headwinds there in terms of privacy but hopefully they'll figure out a way to work through it and maybe become the Google of mobile. We don't know. We'd be interested in your thoughts. Thanks for joining us today. Drop us a comment if this is useful. We hope to see you back in another Brown Bag.