Facebook announced its first quarterly earnings since going public yesterday afternoon, and their struggles with monetizing mobile are a reflection of what every media executive is worried about for their own business.
Mobile growth accelerating
57% of Facebook’s near Billion monthly active users are from mobile, up from 44% from one year ago and 32% from two years ago. That represents a 78% surge in the past two years alone.
Facebook’s audience from mobile will likely be 70% of their total active user base in one year from now as smartphone penetration is accelerating. In February 2012, smartphone penetration surpassed 50% in the United States. With new devices launching from the likes of Apple and Samsung every year and the cost of ownership coming down quickly, it won’t be long before there are billions of smartphones in-market. Consumption on smartphones is happening everywhere.
Last month at Apple’s Worldwide Developers Conference, they announced tight Facebook integration with iOS6, making it easier to Like, Post, Comment and Share your photos, location, updates, news and events directly to Facebook. When iOS6 launches this fall, you can expect Facebook’s mobile engagement to further accelerate.
Facebook needs to compete with itself to monetize mobile
Recent data showed that while mobile represents 23% of consumer time spent (compared to TV, print, web and radio), it only represents 1% of advertiser spend. This is the largest challenge facing Facebook and the media industry – how to monetize mobile.
A major challenge advertisers, marketers and brands have with extending digital campaigns to mobile is the lack of a destination or landing page optimized for the small screen. They are not interested in creating a ‘one-off’, flat mobile landing page that does not connect back into their existing online infrastructure, tools and processes. The investment to extend their existing web presence to mobile is high (especially for large advertisers) and competing against other areas of focus such as e-commerce, search, video and social media.
Learning from Google
Google is the first (and only so far) to build a $1 Billion+ mobile ad business and they are investing in helping advertisers overcome the obstacles faced when going mobile. GOMO is an example of an initiative by Google to help small to medium sized businesses create mobile websites and even test existing websites within mobile browsers.
Google has also launched a Guide to the App Galaxy website to inform and educate the ecosystem on how to navigate the complex app landscape.
Additional investments in helping advertisers understand the value and break down barriers from Facebook and businesses looking to monetize on mobile are necessary to address one of the industry’s biggest challenges.