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Facebook Mobile Ads Put Apple and Google on Notice

Posted by Sheila Shayon on December 15, 2011 03:03 PM

As Facebook's Timeline feature rolls out globally (although not for brands — yet), the social media behemoth is jumping into a new revenue stream: mobile advertising. It's getting ready to leverage the shift to tablets and smartphones just in time to boost its coffers prior to a projected $10 billion IPO. It’s a long awaited, preemptive move against Apple's iAd and Google's mobile ad(ventures).

According to Bloomberg, the social network with 800 million users will put ‘Sponsored Stories’ ads in the mobile News Feed. Up until now, Facebook apps on iPhone and Android have remained ad-free. Although flush with cash, CEO Mark Zuckerberg and team have been chomping at the bit to capitalize on their 350 million users who access Facebook via mobile devices. 

If Facebook embraces mobile ads, “it could set off a fascinating corporate strategy fight with Apple and Google,” writes Business Insider

Google is “virtually printing money from mobile ads running on its Android system,” says BI, with CEO Larry Page projected $2.5 billion in revenues from mobile ads this year. The search giant has cut a fertile and broad swath for Facebook until now, but with FB selling ads, the relationship will require readjustment so Google reaps a revenue cut.

FB's mobile ad move comes as Apple, in an October stand-off, blocked Facebook Credits on iPhone and iPad when the social network refused a 30% cut of those revenues, setting a precedent for standing up to FB.

Apple, meanwhile, is losing ground to Google and making “uncharacteristic compromises and changes to its iAd platform,” according to The Wall Street Journal, which hears that Apple is backing off its $1 million minimum commitment to iAd buyers to a new buy-in of $400,000.

"Hordes of developers have activated iAd, but they say that Apple hasn't sold enough to make any meaningful revenue for them," WSJ adds.

The Journal also reports that Apple has been inviting and entertaining senior marketing executives including those from PepsiCo, Clorox and J.C. Penney, who have paid visits to Apple headquarters, further indication, “They are still learning the advertising world,” commented Shiv Singh, PepsiCo's North American head of digital.

According to eMarketer, Facebook’s revenue is projected to reach $4.27 billion in 2011 and $6.9 billion in 2012. Depending how quickly and aggressively it pushes mobile advertising, look for that 2012 projection to change dramatically.

Comments

Dan T. United States says:

The number of users goes up about 100 Million every time I hear it.  Incredible!

December 15, 2011 05:02 PM #

Comments are closed

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