Bloomberg is reporting that Facebook is preparing to launch a mobile-specific location-based ad product. According to the article Facebook has all-but-confirmed the offering, which the company has been testing for several months and shown to various clients and CMOs.
This is apparently just one of several new ad product ideas under development at the social site.
Mobile is obviously a critical area for Facebook as large numbers of its users increasingly access their accounts primarily through mobile. Mobile monetization is much weaker than PC ad revenue. It’s almost non-existent with only Sponsored Stories appearing in the mobile news feed — that is perhaps until this new mobile ad product launches.
The Bloomberg article is short on details about the new ad product or how it would work precisely. This is what the article says:
A location-based product would take advantage of information shared by almost 1 billion people on Facebook, which has come under scrutiny from regulators in the past about how the company uses data in advertising. Facebook already allows companies to serve ads based on ZIP code, and a mobile product could use more specific, real-time data. The company also allows users to share a physical location when posting an update.
This description suggests multiple targeting parameters being used including location. Facebook will need to be cautious and ensure that its users are not “creeped out” by the new units. Multiple consumer surveys indicate that Smartphone owners have considerable ambivalence about sharing location information; they recognize its utility in many contexts but still have concerns about being “tracked.”
Facebook has 500 million mobile users (as of its last report). The company sees more mobile engagement (monthly minutes) than any other site or app, according to comScore.
Source: comScore (June 2012)
Facebook has been making acquisitions in the mobile space. Among them the high-profile, $1 billion Instagram deal but also a range of others to beef up its mobile development capability.