How Facebook got its mobile strategy right?

With 41% revenues generated through mobile ads, Facebook has been able to monetise this space well. exchange4media takes a look at the takeaways for marketers from this success

e4m by Saloni Surti
Published: Aug 22, 2013 8:07 AM  | 4 min read
How Facebook got its mobile strategy right?

With an increase in ad revenues on the back of mobile, Facebook is back in the good books of Wall Street. Facebook’s shares witnessed a 40 per cent growth within a week of the social networking site announcing a surge in revenues through mobile advertising.

Facebook reported that 88 per cent of its total revenue came from advertising, out of which 41 per cent was generated through mobile ads. With this declaration has come a flurry of major decisions taken by the social media owner as well as marketers. While brands now look at mobile as a more serious device for advertising, Facebook announced its intentions to monetise the space by grabbing a share in the global e-commerce market.

exchange4media takes a look at what do these numbers imply for Facebook and what marketers learn from them so as to win the mobile medium for their brands.

What did Facebook do right?
Post the IPO debacle, Facebook had no option but to perform well. Facebook’s mobile app came as a surprise as the impression was that increasing use of the app was users generally getting habituated to the social network added with innovating technology, which was clearly not the case.

“The opening up of newsfeed ads as well as promoted posts meant that a completely new ad property got created, which has delivered far greater impact to advertisers. Facebook has also been extremely innovative in tapping into completely new ad units like the app install ads for mobile. Overall, Facebook has been able to address the needs of both users and advertisers through its mobile strategy,” explained Sabyasachi Mitter, MD, ibs.

While the promoted posts and ads did the trick for marketers, mobile users of the network increased immensely with improvement in functionality, intuitive UI and the ease of using Facebook on mobile. Anil Nair, CEO and Managing Partner, Digital Law & Kenneth is of the opinion that the functionality, shareability factor and content have made the Facebook application a success.

Application developers were seen actively promoting themselves on Facebook’s mobile application, which turned out to be one of the biggest inventories for the networking site. Also, getting newsfeed on mobile in its most flexible manner worked extremely well for Facebook.

The next big step
Facebook has 819 million users globally checking their page daily through their mobile handsets, while the number of users in India accessing Facebook on mobile recently reached the 62-million mark. To further leverage the mobile space, Facebook has announced its plan to partner with e-commerce sites to enable mobile payment through Facebook accounts. However, is the risk worth taking for Facebook, which might face issues like it had faced with Facebook gifts and put the mobile success at stake?

“Facebook is now engaging with a larger social currency, which is an extremely logical movie. It is not just about monetisation for Facebook, because if it does not venture into this space, it might lose out on this opportunity completely,” pointed out Chetan Asher, Founder & CEO, Tonic Media.

The India perspective
Also, with users spending more and more time on the website, e-commerce is a natural route, explained Nair. “An average Indian Facebook user tends to spend at least six hours per month on Facebook. If users are on Facebook chatting, checking updates, sharing stories of their lives, it is more than natural that commerce can be an interesting step,” he added.

Having said that, the m-commerce market itself in India is still evolving and thus can be of concern for Facebook. “In India, mobile led e-commerce is still in its early stages, with many e-commerce platforms still not fully ready to drive transactions from their mobile optimised websites. This is likely to change in the coming months with more transactions being driven on mobile, including those of service providers like mobile recharges and bill payment. Once this ecosystem evolves, Facebook will be well placed to leverage its mobile platform for e-commerce transactions,” remarked Mitter.

Facebook’s success on mobile is not a result of the growing craze for the website or the advanced technology, but because of catering to the users and marketers smartly. With the increasing importance of mobile and app economy, marketers can definitely take a tip or two from the social networking site’s success.

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