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Make room for Facebook: Publishers rise to the mobile challenge

Rohit Dadwal, MMA

Facebook’s latest attempt to insinuate itself into the fabric of modern life, Facebook Home, is an interesting blend of operating system and app(lication) they’re calling an apperating system. It will be available as a download in Google’s Play Store, and can be installed on Android phones, basically sitting between the operating system and running apps, offering integrated Facebook functionality at all levels.

Why would Facebook bother with this when it already has the lion’s share of the social media space, as well as apps that look good and work well on pretty much every platform there is? This seems to be a little bit of a mystery, but a recently released IDC report can shed some light.

Titled 2012 U.S. Mobile Advertising Market Sizing and Vendor Market Shares, the report includes some interesting findings. Chief among them is that publishers now lead the mobile display ad segment. Before, the majority of spending went to ad networks such as Google, Millennial Media and Apple’s iAds. This year, publishers like Facebook, Twitter, Pandora  and the Weather Channel registered such strong sales that they took 52% of mobile display ad spending in the United States.

It turns out that Facebook and others like it have a strong incentive to offer advertising, because that is the primary means of generating revenue. It makes perfect sense for Facebook to do the best it can to become as pervasive as possible, and to encourage its members to use it as often as possible. This will increase their exposure to the advertisements that Facebook is hosting, and naturally Facebook Home will seek to increase the display opportunities, hopefully without being intrusive enough (or obnoxious enough) that users will stop using it.

Publishers in this mobile/online space have nothing of value besides the services they offer to consumers for free, who in return give up their personal information. This is what the publishers utilise to offer better targeting and better demographic reach than many other media. This naturally, represents a challenge to ad networks, as well as to Google and Apple, who also count advertising sales as part of their portfolios. But publishers have a strong advantage, in that they build the platforms that their services run on, and gives them a higher degree of control than their rivals.

Whether this trend will appear in Asia is questionable. The space is so diverse that it seems unlikely, although perhaps large social media neteworks, like those in China, may follow suit. Ad networks will have to step up their game in order to remain relevant, and make better use of the mobile space to offer competing opportunities. For the moment, it looks like publishers, at least in the United States, have come up with a way to monetize mobile, and in a way that is threatening the status quo.

Rohit Dadwal

The author, Rohit Dadwal, is the Managing Director of Mobile Marketing Association APAC.