ADOTAS – A silent war is afoot with ad giants Facebook and Google aggressively competing behind the scenes for consumers’ online attention. Over the last several years, both companies have made a series of calculated moves in attempt to corner the mobile advertising market. But while Facebook is in the early stages of building its own ad network where brands can purchase mobile ads both on the social network and across apps, Google has an established and mature mobile ad targeting platform to help advertisers reach global audiences through its $750 million acquisition of AdMob back in November 2009.
Let’s put this in perspective: Google currently owns 36 percent of the U.S. mobile ad market, just about double Facebook’s share according to eMarketer, although it’s important to note that Facebook didn’t fully monetize its platform until 2009 – five years after the social network launched. Fast-forward to last week, when Facebook reported that mobile ads now comprise 59 percent of its overall ad revenues, up from 30 percent in Q1 2013. Understandably, industry analysts and investors are applauding Facebook’s rapid shift towards mobile and believe it’s the future of online publishing. But how did it get there?
It’s all about the News Feed, with advertisers willing to pay a premium for this ad placement. According to Nate Elliot from Forrester Research, “Right rail ads drag down Facebook advertising’s prices and performance; the News Feed ads work better. Mobile is News Feed-only. So the shift to mobile leaves Facebook with fewer impressions per user, but those impressions are higher quality.”
“The traditional search/sisplay ad network market is extremely crowded/competitive,” said Jeff Revoy, President CEO of Viralheat and former VP of Search at Yahoo. “However, the mobile ad market is still developing, so Facebook has a great chance to be the industry leader. It also mirrors the migration of their users to mobile/tablet environments for their interaction with Facebook.”
Yes, Facebook is rumored to be unveiling its mobile ad network at the F8 conference in San Francisco this week – in my opinion, a smart move towards solidifying the company’s position and continuing to steal market share away from Google. But how can Facebook overcome the monotony of its scroll-read-scroll-scroll-scroll mobile experience?
Funny you should ask. You may have noticed that Facebook has launched an auto-play video feature within the News Feed to keep things interesting for consumers. Google Ventures-backed mobile monetization company Vungle is also bringing TV ads to mobile environments, currently powering 1 billion views per month and touting itself as “the industry’s first in-app video exchange.”
“Our technology is the way that developers show video ads in apps,” said Andrea Sharfin, VP of marketing at Vungle. “Devs insert a tiny bit of Vungle code (called an SDK) into their apps, and configure it to show videos at certain times and places within the application. Vungle then sells that inventory to advertisers, either directly or through programmatic channels. Our technology is absolutely unique — Vungle Exchange is the first exchange built from the ground up for in-app video.”
TV advertising is a $200 billion market, but until now brands faced significant technological hurdles to advertise specifically within apps. Vungle’s mobile video exchange confronts these hurdles, and for the first time ever, brands can invest their ad dollars into in-app video through programmatic channels.
Regarding Facebook’s advancements in mobile advertising, Sharfin added, “It’s great for the entire mobile ad industry because it helps more dollars flow to mobile. We’re particularly excited about Facebook’s entry into video. It validates our market, helps educate our target clients, and means that a huge pool of 15-second videos will be available for us to run.”