Why Facebook’s mobile ad network isn’t the silver bullet

FacebookPhoneScreenMobile display advertising is currently reminiscent to the early years of online display with potential ad networks trying to work out the way or the technology to condense, control and package the vast array of mobile inventory.

Despite the progress – the process is harder for mobile than it was for online – it’s still relatively hard for buyers of advertising to buy across a large portfolio or network of mobile sites.

Facebook recently took a significant step in the land-grab by announcing plans to roll out a mobile ad network allowing advertisers to target people on mobile apps and websites using Facebook’s data. The network will let developers serve Facebook ads within their apps, giving advertisers access to apps where Facebook’s members already use their login details.

Facebook are unsurprisingly bullish about the move, chief executive Mark Zuckerberg said: “This is really the first time that we’re going to help you monetise on mobile in a serious way.” So will it live up to the hype and what does it mean for the space in general?

A friendly face

There’s much confusion in the mobile ad space, probably more than people let on. The fact that planners and buyers probably already use Facebook from a professional and personal perspective means this familiarity should help smooth the entry into adoption of mobile ad networks. It’s certainly drawn more attention to the space, if nothing else

The flipside is that Facebook will always have some restrictions and never be totally open. Thus, its vital buyers don’t see Facebook as the “be all and end all” when it comes to mobile ad networks and be blind to other opportunities. After all, like any company, Facebook’s foray is more about fitting into its own overall operating model than what is best or true for the whole industry.

Clash of the Titans

Facebook certainly has a chance to be the dominant mobile player and it intensifies the ad tech battle ground between the online giants such as Google and Twitter around smartphones.

Facebook has the advantage of having done well in mobile, being able to funnel advertiser revenues because of the huge time people spend on the app. They’ve also strengthened with the Instagram and WhatsApp acquisitions. Together with Facebook Messenger this multi-pronged app strategy suits the mobile ecosystem. However, and it’s a big one, the key obstacle is how well Facebook can integrate these all under one umbrella network. Only time will tell if this is even possible.

Google hasn’t dominated mobile yet because people search differently there (think Foursquare) and Google search doesn’t work in apps, which is where over half of audience time is spent. Consequently, it’s very difficult to place ads, particularly creative formats which partly explains why mobile video is growing so quickly. Despite buying a mobile ad network and forcing advertisers to buy mobile as part of its platform, Google still hasn’t figured out the secret sauce to make mobile a success.

Twitter certainly has the audience and interest but its platform isn’t suited for advertisers. It needed a mobile network desperately – hence the acquisition of mobile ad server MoPub. Like Facebook, Twitter is trying to reach its audience beyond its own platform. However, Facebook has the edge as its logins are used by hundreds of apps, consequently, it’s better integrated with a broader user base. Twitter needs to find a way to make money outside the traditional ad tech space by figuring out how to play a bigger role as a media voice or channel.

3 key criteria for your mobile ad network

As with choosing an online ad network, buyers need to ensure their mobile ad network is transparent about their sources of inventory and where the ads could end up. How much is sourced directly from publishers and third parties and who they are?

Secondly, it’s important to know what differentiates them from the competition, does their technology or ad format mean they have exclusive publisher deals?

Finally, it may seem obvious to say, but they must be able to provide the right reporting metrics so advertisers will be able to understand and gauge the success of a mobile campaign. It’s no use being able to deliver a campaign if you can’t measure its effectiveness.

Farzad Jamal is VP Europe of Vdopia