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Facebook?s mobile fortunes improve but rich user experiences still lacking

Facebook executives are talking up what they say are significant advances made in mobile during the first quarter, including the launch of Facebook Home and improved targeting capabilities. However, Facebook continues to look for ways to deliver rich advertising experiences to mobile users.

The social network?s mobile advertising business took another leap forward during the first quarter of 2013 as ad revenues from mobile reached 30 percent of total ad revenues, up from 23 percent in the fourth quarter of 2012 and 14 percent in the third quarter. Overall, Facebook?s revenue from advertising totaled $1.25 billion, up 43 percent from the same quarter last year.

?We are still in the early days of what we are doing and that is particularly true in mobile,? said David Ebersam, chief financial officer at Facebook, Menlo Park, CA. ?A year ago we didn?t have any mobile ad revenue and now it is 30 percent of our ad revenue.

?We believe that mobile has the opportunity to be huge for us if we can execute well,? he said. ?We?ve got a really large mobile user base, they are very engaged and spend a lot of time with us. We have an ad format that works for us on mobile and we have identities, so that we can put the right ad in front of the right people.

?Obviously, we will continue to develop tools to enable us to monetize our advertising better and potentially in new ways as well. The big opportunity that is right in front of us is trying to make the mobile advertising product higher quality and more relevant.?

Home sweet home
During a conference call with analysts to discuss the first quarter results, Facebook CEO Mark Zuckerberg said that the launch of Facebook Home is an important milestone for the company because it creates a completely new mobile experience for users and promised that it would be rolled out to more people and will continue to be updated with new services in the coming months.

Facebook Home is available on Android devices and enables users to users to interact directly with friends from the home screen and lock screen of their device. Users do not need to go into the Facebook app to view notifications from their connections.

The social network also introduced new advertising products during the first quarter such as Lookalike Audiences, Managed Custom Audiences and Partner Categories, which help marketers improve their targeting capabilities on Facebook, including on mobile.

In a big win for the company last month, GM reportedly launched a mobile-only advertising campaign on Facebook for the Chevrolet Sonic.

The second largest U.S. marketer famously pulled all of its advertising from Facebook last year shortly before the social network made its initial public offering. While GM?s departure played a role in Facebook?s rocky second half, the automaker has reportedly decided to return to Facebook following numerous refinements of its mobile advertising offerings such as better targeting capabilities.

?I think they definitely have improved their mobile advertising offering but I think that the challenge for anybody including Facebook is how do you make it a rich experience on the small screen,? said Matt Wise, CEO of ePrize, Pleasant Ridge, MI. ?They are making advances in targeting but I don?t think they have solved the rich user experience yet.

?This is something that a lot of people are working on,? he said. ?I am encouraged by the fact that Facebook is putting so much focus on it ? it encourages me that some new innovative models will come out.?

User insight
Other key results from Facebook?s first quarter ended March 31 include that mobile monthly active users totaled 751 million as of March 31, an increase of 54 percent year-over-year.

Facebook also reported that Instagram reached 100 million monthly active users in the first quarter of 2013 and the monthly active users totaled 1.11 billion, up 23 percent year-over-year.

The social network?s revenue for the first quarter totaled $1.46 billion, up 38 percent year-over-year. The company?s net income totaled $219 million, up 7 percent year-over-year.

?Facebook has reported that its browser usage has shifted almost completely over to their mobile apps ? 80 percent of total users - and is now allocating massive resources to monetizing its mobile traffic, drawing big spenders to experiment with various advertising techniques,? said Sephi Shapira, CEO of MassiveImpact, Tel Aviv, Israel.

?A key to sustainable future growth in ad revenue will be a utilization of Facebook?s vast amount of user data in ad serving techniques, making ads substantially more relevant to the end user and in turn more profitable for the advertiser,? he said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York