Facebook Is Again Testing An External Mobile Ad Network

Business Insider

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Facebook CEO Mark Zuckerberg

Facebook has again begun testing a mobile ad network that would use Facebook data to place ads on non-Facebook apps on their mobile phones, the company confirmed to Business Insider.

The company previously tested such a network but mysteriously abandoned the effort in December last year. The new move occurs coincidentally with Twitter's recent move to generate revenue from ads served in off-Twitter mobile ad networks.

If Facebook's test succeeds, such a network could bolt on a huge new revenue stream for the company. Facebook currently gets about $656 million per quarter from mobile advertising. But that revenue is all internal — it comes from Facebook's own web site and mobile app.

That's still a huge sum of money; Facebook's mobile ad business is second only to Google's. The next largest mobile ad network is likely run by Millennial Media, which generates $57 million per quarter. (Millennial just partnered with AppNexus to make its mobile ad reach even greater.)

A Facebook spokesperson gave us this statement:

We're currently running a second test to show Facebook ads off Facebook in mobile apps and on mobile sites. Our goal is to improve both targeting and relevancy of the ads people see. Since this is a test, we don't have additional details to share.

The move has been a long time coming. Facebook currently sells advertising in two main ways: From clients who pay directly to run ads on Facebook based on Facebook's own targeting data; and in an ad exchange named FBX that uses tracking cookies from other non-Facebook web sites to target users entering the site. Both methods have the same apparent result for consumers: ads show up on Facebook and in their mobile Facebook news feeds.

The change with this new mobile ad network test is that ads triggered by Facebook's targeting data would show up on other companies' mobile web sites and apps. That potentially opens up the entire mobile web and app environment to Facebook advertising of one sort or another.

Our sources tell us that targeting options inside the network would include standard Facebook demographic segments, such as age, gender, and interests.

The move invites comparisons to Twitter, which is gearing up for its own IPO later this year. Twitter recently acquired MoPub for $350 million precisely because MoPub operates non-Twitter ad exchanges and networks. It is expected that Twitter will attempt to leverage data about its own users in order to target them on other apps and web sites.

Disclosure: The author owns Facebook stock.



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