Facebook Home: a mobile marketer’s dream?

According to IDC, mobile publishers such as Facebook, Pandora, and Twitter are fast taking over the mobile display advertising market in the United States. Overall mobile ad spending in the US increased by 88% in 2012 to $4.5 billion, as marketers spend an increasing portion of their digital ad budgets on mobile. The share of overall spending allocated for smartphones and tablets reached 11% last year, up from 7% in 2011.

With increased mobile ad budgets up for grabs the timing of the launch of the new Facebook Home is perfect. Indeed, Robin Grant, the global managing director of We Are Social, thinks that Facebook Home could very be the holy grail of mobile advertising. He told AdWeek, “Aside from mobile operators, no other company is able to keep track of a consumer’s location at all times – which, privacy settings permitting, Facebook could now do with Home.”

At the launch event Mark Zuckerberg commented, “We’re not building a phone, and we’re not building an operating system… A great phone might sell 10 or 20 million units, our user base is at about a billion. Even if we made a great phone, we’d only be serving one or 2% of our base.”

Facebook Home reinvents the start screen on Google Android-based smartphones to display a Facebook Cover Feed that brings you the latest status updates from your closest Facebook friends and provides a messaging app called ‘Chat Heads’ up front.

So while it’s not the Facebook phone per se, it’s just as good as, if not better. This strategy allows Facebook to confidently enter the mobile market by effectively hijacking proven hardware. It’s a smart way for Facebook to instantly build a strong mobile presence without the risk involved in developing its own hardware or operating system. If successful, Facebook Home will draw more users and encourage them to be more active on the social network. Every time you glance at your phone, you’ll be looking at your Facebook page and giving Facebook more opportunities to collect information about you than ever before.

And it’s this data that is really exciting for marketers. It’s the longed awaited nirvana of targeted mobile advertising and a mechanism to deliver location relevant and timely commercial messages to consumers. While it’s true that Mark Zuckerberg has said very little to date about the advertising potential of this new user experience, it is after all the whole point of the exercise. Facebook makes its money on ads, not on tools and features. By displaying ads in the Cover Feed, Facebook can give marketers the ability to push targeted commercial messages at users, any time, any place.

Putting the social network up front and centre on as many mobile devices as possible, and convincing more people to spend more time with Facebook on mobile devices, Facebook can serve ads to mobile users and fast track its ability to generate substantial mobile advertising revenue.

That said, this nirvana for marketers and the ability to deliver targeted ads to people carrying smartphones could very well turn out to be purgatory for Facebook users. Perhaps it’s just me, but I’m not sure everyone on the planet wants the added distractions of a steady stream of their Facebook stuff (good, bad and ugly) up front and centre on their mobile devices.

While Facebook diehards are sure to welcome the novelty of Facebook Home even if it does restrict their overall mobile experience, I can’t see the prospect of ads overtaking their home screens being so warmly welcomed.

Even so, eMarketer is predicting that Facebook will reap $965 million in US mobile ad revenue in 2013, which is about 2.5 times the $391 million it made in 2012.

Clark Fredricksen, vice president at eMarketer says that there are clear reasons why a deeper integration with mobile operating systems and handsets makes sense for Facebook. “At the end of the day, the more deeply Facebook can engage consumers, no matter what device or operating system or handset,” the better.

The Facebook Home super app launched for select Android smartphones (4.0 and up) on 12 April in the US as a download from the Google play store. Looking at the initial reviews, Facebook Home is currently rating at 2.4 stars.

The new HTC First is shipping with the super app pre-installed.

 

Simon van Wyk
BY Simon van Wyk ON 19 April 2013
Founder, HotHouse Interactive. Tweet him @Hot_House