Last Wednesday, Webtrends was honored to have been one of a selected handful of companies that were invited to Facebook’s Preferred Marketing Developer Summit at their Menlo Park offices. As with any of the partners that were invited to this Summit, we’re bound by an NDA that prohibits us from sharing most of what was presented there. But, “the Social Network” has been in the news quite a bit this week and most of it relates to what’s unfolding with the mobile monetization story and some of the new ways in which Facebook has chosen to look at itself. Since this course was set in motion long ago at a similar Developer Summit, I feel safe in commenting upon how well they’ve embraced these new realities and honestly executed well on their strategy.
Most of us will recall all the attention that was placed on Facebook’s less than illustrious IPO.
The stock quickly tanked after many analysts looked at the explosion of mobile-related Facebook traffic and questioned whether the company had a viable monetization strategy. Ironically, a similar Developer Summit, which happened prior to that, set in motion a slew of innovations around mobile ad units (app downloads, sponsored stories, etc) that were often the collaborative efforts of many partners in their critical developer ecosystem.
Fast forward to this past Wednesday; while I was on campus, Facebook was also releasing it’s latest earnings ($1.46bn vs $1.44 expected) to Wall Street, and while they exceeded expectations it was how they did it that got everyone’s attention. In their release, the company disclosed that 30% of its total advertising revenue now stemmed from MOBILE advertising. So, in less than a year, a plan set in place at a previous Developer’s Summit has paid very large and important dividends.
What was also interesting was to see all the critics line up to pile their criticism on Facebook’s recently announced “home”. Home is essentially both device and Android OS user experience. Critics called it Facebook 24/7 and wondered openly how many mobile users would embrace this kind of “in your face” experience and wondered whether Zuckerberg and Facebook may have “laid an egg.”. While that remains to be seen, I honestly wouldn’t side up with the skeptics because most of them were the same people saying that Zuck had no plan to monetize mobile.
What the critics are missing is the fact that Facebook’s users have become HIGHLY mobile and HIGHLY engaged. In fact, here’s a few points which underscore that:
The company recently disclosed that it now has approx. 1.1bn USERS WW.
Americans now spend more time on Facebook Mobile than they do on the website.
WW their Mobile Active Users (MAUs) have increased from 488m in Q1-12’ to 751m in Q1-13’.
The amount of users connecting to Facebook via mobile only has grown from 83m in Q1-12’ to 189m in Q1-13’.
The amount of time spent with mobile is growing at 14x the rate of the desktop web (eMarketer Oct 2012)
Of all time spent in apps, nearly 40% of it now stems from “social” and the vast majority of that is Facebook (eMarketer – Feb 2013)
3800 developers used Facebook’s new mobile app download units to drive over 25m downloads (Facebook earnings released from WED)
Facebook is now the 2nd largest mobile display advertising network – behind only GOOG – and that all took place in a tiny amount of time.
With some of these facts in mind, understand that Facebook HOME is all about:
Capturing even more new Facebook users. The more users FB adds, the more ad dollars it continues to attract.
Increasing the amount of interactions with “The Social Network” and ultimately delivering more available ad units.
Now, will HOME be a smash success or begin to encroach on the marketshares of stallwarts like APPL, GOOG, RIM or MSFT? Absolutely not; nor do I believe that Mr. Zuckerberg sees himself as necessarily competing in that space. Instead, he’s come up with another ingenious means of immersing the user in a mobile Facebook experience that allows him to serve rich media advertising experiences on a highly targeted basis. In that vein, he will have succeeded well beyond what these skeptics are projecting and don’t be surprised if a year from now those same critics are scratching their heads and wondering how he did it.
Facebook’s success rests on a few key realities:
They understand the world is going mobile at the speed of sound and they want to own the lion’s share of the social traffic that stems from these devices.
Facebook does not see itself as a platform, a publisher, an OS provider, an app developer or anything other than a premier MARKETING solutions provider. And as their performance in this past year suggests – they are well on their way to executing on this vision.