Will the new monetization effort work for the Facebook?
On January 22 this year, Facebook revealed that it is expanding its reach by testing ads in third party mobile apps. Facebook didn’t reveal any information related to its hand picked partners (mobile apps) and figures related to this experiment.
So how can we make predictions about its success or failures? The answer is, we can’t. To be honest, our experiences with two tech giants (Google & Facebook) has proved two things consistently right over the course of time. One, we often don’t get the true picture of their upcoming products & services, second they surprise us consistently with their decisions to launch/drop new services.
On the official Facebook developers blog, someone in the comments mentioned it as a next billion dollar idea. I’m sure that it could turn into a billion dollar idea. My only question is, at what cost? We have already heard a lot of criticism and outcries when Instagram launched its first advertising campaign. So what if Facebook receives criticism over third party mobile ads?
Partner or not, I do not like advertisements while playing a game or using an app, period. And I know there are a lot of people who feel the same way. Why would any developer need an ad partner to monetize their app? People skip the ads anyway, so what’s the point? Consider Flappy Birds, before the developer took it down the app was reportedly making $50,000 a day through in app advertisement. This is huge success, proving the importance of in app advertising for small companies and indie developers.
On the other hand, this new opportunity may become a new advertising horizon for small and medium sized companies. Why? The power to reach millennials (with buying capabilities) and low cost advertising may become a better choice against Google Adwords & Adsense. This will also help companies to build a strong brand identity.
As the test is still a work in progress. We don’t have any figures and facts to assert any claim. However, we have learned that Facebook has reported $2.344 billion revenues in terms of advertising. As per Zuckerberg’s “more than 50% of our ad revenue came from mobile”.
Facebook Quarter by Quarter Revenues (Image Source: Facebook Investor Relations)
As the above figures and Zuckerberg’s statement suggest that mobile advertising is on a roller coaster ride. Advertisers and app developers will watch these figures gleefully, and this will certainly instigate more and more partners to join the ads in third party mobile apps program, once it is officially launched by Facebook.
One reason that will add value to this test is that Facebook will be using its own ad network. It will be free of “other ad networks”. You may remember Facebook’s last year endeavors with Zynga Inc and other ad networks. It happened in the year 2012 and 2013 but Facebook mysteriously dropped the idea after a very short stint.
Wrap Up
So we don’t expect this test will disappoint Facebook, advertisers and app developers in any way. The outcome may be an overwhelming success. But in my opinion, Facebook will have to revise its strategy to adjust fan’s criticism, just as Instagram did. Today, we live in a commercialized world. You cannot hide you mobile from an ad, but you can certainly hide the ad in your mobile.
