This month, Facebook has observed a astounding growth in Mobile only users from 83 million to a whopping 102 million in less than 4 months. This confirms that more than 18% of Facebook users do not even visit the desktop site. Since Facebook is observing a huge chunk of its users towards the mobile, it is necessary for it to shift focus of tis advertising to the Mobile Networks. If they delay it any further the stocks along with their profit shares will come crashing down.
As I have been stating time and again that the market is shifting aggressively towards mobile marketing and thus most big players are also testing waters and re-strategizing their plans to make the most of this shift.
Facebook has managed to bring down their acquisition spends when they bought Tagtile, Glancee, Lightbox & Karma. Not only this, they were also able to achieve a global growth of 29% where in Brazil grew by 146% and India by an 84%. Though the growth is tremendous the monetization is limited.
In my opinion what Facebook must fix immediately is their advertising on Facebook’s mobile version. On the desktop, version Facebook can show a maximum of 8 ads per page whereas that is not the case on the mobile version of Facebook. With more and more people shifting towards the mobile and abandoning the website, the revenue generated through these ads has been suffering.
“During the second quarter of 2012, the number of DAUs using personal computers was essentially flat, and declined modestly in certain key markets such as the United States and Europe, while mobile DAUs continued to increase.” As stated in the 10-Q.
Though Facebook did attempt to feature ads on the mobiles and tablets but stopped after a 5 month trial period. At the moment, Facebook was only featuring the occasional sponsored story on their mobile version which got them revenue of almost a million per day half of which is from the mobile alone. The CFO David Ebersman thinks that taking it slow would help, I completely disagree. They need to innovate rather than test old methods in the new field.
Bottom line is simple, using their old ad formats on the mobile version of Facebook will interfere with the user experience and may result in loss of user and consequently large sums of money over a period of time. In order to keep making money Facebook would need to buckle up and come up with a new form of advertising for mobile that would not only be easy on the Facebook mobile user but fetch them good revenue as well.