Mark Zuckerberg and crew may have just dialed-in some hefty numbers associated with Facebook’s past-Wednesday IPO. According to the numbers, things are going swimmingly for the social media giant. However, as sources tell the New York Times, “We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven.”
What? Didn’t I read some pretty convincing mobile usage statistics a little while ago? Facebook enjoys a healthy pool of users from America as well as widespread usage in other lands. Considering many in other countries are leveraging cell phones, it’s surprising Facebook, a brand who has been making good enough decisions to supply the biggest public offering in history, is shying away from mobile marketing.
Maybe I’m being too critical of the social media site; after all, the brand is not alone in attempting to make a smooth transition from PCs to smart phones and mobile devices. Web masters have to face it; smart phone screens are smaller, providing less playing field for applications; buttons are smaller, making browsing more difficult; and, a plethora of apps and ads are likely to slow site speed, which very little numbers of PC and smart phone users have patience for.
Additionally, usage of smart phones is still in its baby stages despite the boom of interest. As Noah Elkin, an eMarketer analyst advises, “It’s still immature when compared to online, print and TV advertising. We’ve had ads on our desktops for 15 years, and we’re used to them.” The Times article offers an Elkin factoid: people are eight times more likely to click on computer-hosted ads than ones hosted within mobile devices.
If you’re a bit familiar with Zuckerberg through past and recent press, you may get an image of a man who, despite being a college dropout (an Ivy League dropout), is no dummy. The article hints at a purposeful neglect of immediate mobile advertising, allowing Facebook to first generate interest in its mobile site and associated applications. However, Zuckerberg is faced with a new notion of operating his company while considering outside investors.
Surely, investors are no stranger to the tempting numbers associated with mobile marketing. Facebook garners a majority of its profits from selling ad space on its pages. As a Tech Crunch post advises, mobile advertising is projected to skyrocket in 2012, surging to $5.8 billion!
But let’s get back to Zuckerberg and his possible strategy. One serial entrepreneur explains the landscape of mobile advertising as “the art of war.” Can Facebook boldly make decisions without thinking about competitors? After ads, Facebook makes its revenue from application partners. When app partners make sales, Facebook takes a cut. But when such transactions take place on iPads and iPhones, it has to ‘share’ revenue with Apple (currently taking a 30 percent bite out of app vendor proceeds). It makes more cents for Facebook to take a lackadaisical approach toward mobile marketing right now.
Joe Hewitt, an app engineer formerly with Facebook, offers insight, “It’s always to Facebook’s advantage to have the Web be their operating system and leverage that to their advantage.” He is elaborating on the fact that Facebook would have to engineer apps to reflect the range of various cell phone models and manufacturers.
Facebook, after its IPO is more likely to cater to ‘friends’ and investors of the brand. In the IPO filing, the brand mentions mobile advertising intention. Advertiser-chosen and highlighted ‘sponsored stories,’ making way into user news streams, may be just one, upcoming mobile implementation.