Facebook Beta Launches New Mobile Ad Network Using Your Data To Target You With Banner Ads In Other Apps
Facebook today begins testing its own mobile ad network. Advertisers can pay to target you with ads for app stores or websites based on your Facebook data that appears while you're on other apps and mobile sites.
Context & Ripple Effects
This beta is the payoff to two earlier signals: Bloomberg reported in June 2012 that Facebook was readying a location-based mobile ad product, and the Wall Street Journal followed in July with news it would target ads based on app usage. Today's test turns both threads into a live product: Facebook data powering banner ads served inside other people's apps and mobile sites.
The timing matters because Facebook has spent September rebuilding its mobile credibility — relaunching its native iOS app after Zuckerberg called the HTML5 bet one of his biggest missteps, unveiling its ad exchange, and closing the Instagram acquisition. A beta ad network extends the company's monetization beyond its own apps at the moment its native client finally performs well enough to make mobile scale credible.
First-order effects
- Advertisers gain a new buy: Facebook-profile targeting applied to banner inventory on third-party apps and mobile sites, so a user's Facebook data now follows them into properties Facebook doesn't own.
- App publishers and mobile sites hosting these banners get a new demand source whose pitch is identity rather than placement.
Second-order effects
- Standalone mobile ad networks selling banner inventory without social-graph data face a competitor whose targeting signal comes free from a billion-user profile base, pressuring their pricing on comparable placements.
- Facebook's data footprint expands past its own apps, raising the stakes for how much targeting information leaves its walled garden — and inviting privacy scrutiny of exactly what fields advertisers can buy against.
Third-order effects
- If the beta holds, mobile advertising shifts from cookie- and context-based networks toward identity graphs controlled by a handful of platforms, making off-Facebook inventory an extension of Facebook's core ad business rather than a side channel.
- The more ad dollars route through platform-owned identities, the more regulators and app-store gatekeepers become the arbiters of what cross-app data use is permissible.
The trend: Mobile advertising is consolidating around platform-owned identity graphs, with Facebook moving first to turn its social data into the default targeting layer for other companies' apps.