25 April 2014
Recent developments at Facebook have led to a spike in the company's value on the stock market. The rapid growth in the social networking pioneer's mobile advertising activities saw the business accrue a massive 60 per cent increase in revenue. This in turn resulted in Facebook's share price rising by a huge 15 per cent, showing investor confidence in the company's direction.
The CFO of Facebook, David Ebersman, believes that it is thanks to the site's long-term business plan that the benefits are being felt in this way. "Investments made over the last couple of years are paying off," Ebersman noted. Whilst the value of Facebook as a company is being enhanced by the use of mobile app marketing, this new strategy is still in its relative infancy.
How Does It Work?
Facebook's mobile ad network basically helps developers of apps create ways in which they can earn money through third-party apps. As with the advertising shown on Facebook's regular website, the advertising is intended to be made as relevant to individual users as possible, based on pages liked, content posted and interactions made with businesses. For example, if you had been posting about mobile phone cases, your mobile app may well throw up the odd advertisement for customised phone cases or other phone peripherals and accessories. The targeting of advertising in this way helps it to really reach out to the intended audience, working far more efficiently than the old-fashioned scattergun approach.
Similar to Google's Advertising Approach
If you use Google regularly to complete your searches on the internet, you may well have noticed incredibly targeted apps coming up on your screen on various websites. Rather than buying advertising real estate on a web page, advertisers are increasingly paying Google to be displayed on the screens of potentially interested users based on their internet browsing habits.
Making Money Through Apps
As the app market has changed over the years, fewer developers are charging users to download their apps. Instead, they are looking at advertising to create revenue. Of course, the use of traditional online advertising means that adverts may not be reaching interested parties. Facebook's new approach will use its targeting algorithms, which will be developed further to work within this new context with a small group of advertisers to begin with. Working with a small number of advertisers, Facebook can prove the concept of this approach, working to provide relevant and useful advertising to users whilst providing app developers with a great source of income. Mark Zuckerberg's social networking giant hopes to bridge the gap that developers found emerged between the revenue coming in from advertising and what they would have made charging for the apps.
Danny Butler on Friday, April 25, 2014 · Leave a Comment
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