The native Facebook app released last month deserves all of the praise it’s gotten. Functionally, it’s worlds better than the company’s previous efforts in mobile (read: it’s actually usable). Now that the product is up to snuff - though there’s still certainly remove for improvement - the calls for Zuckerberg & Co to better monetize mobile will be even louder. (See: Barron’s declaring the FB stock worth only $15, partly because of their slow and underwhelming ability to monetize an increasingly mobile userbase.)
Facebook claims its new mobile ad units, Sponsored Stories, are doing well. But I think they’ve still got a long way to go. For the past several weeks, I see barely any Sponsored Stories in my mobile News Feed. And when I do, I either see the same pages repeatedly (Amazon, more often than not), or I see ads for pages I would never, ever like. For example, some random restaurant in NYC.
Together, these points speak to an inventory problem; namely, it seems Facebook doesn’t have that many buyers for its shiny new mobile ad product. That will change over time though, and it’s something I’m sure their ad sales team is already aggressively working on correcting.
A bigger issue is the technology one, particularly the algorithms that dictate what content, including ads, that users see on Facebook mobile. For a long time now, those algorithms have been different than those on the web. I see different content from different friends on web versus mobile. And almost always - for me, at least - the content I see on mobile is worse. Too often my mobile News Feed is cluttered with updates from “friends” I haven’t interacted with in years. For example:
I knew Siddhant six years ago, my sophomore year of college. After that he moved back to India and we’ve had negligible interaction on Facebook since (wall posts, photos, pokes, whatever), let alone even spoken. Similar situation with Kara. Yet their content is taking up valuable screen real estate on my phone. It’s mucking up the basic user experience of Facebook, which runs the risk of driving users away.
Perhaps even more crucially (at least as the markets are concerned) is that this algorithm problem extends to Sponsored Stories as well:
While whatever Facebook knows about me conceivably does give a good indication that I’d be a probable candidate to “like” Samsung or Amazon on the platform, showing me that Krupali & Anneliese liked those pages does not in any way incentivize that behavior. Frankly, I can’t even remember who Krupali is and I’ve maybe had 30 total minutes of 1-on-1 interaction with Anneliese in my life.
Facebook’s whole pitch to brands is that their ad units are more powerful because of the social context around them. But if that context proves to be hollow, users won’t click. And when users don’t click, advertisers stop spending money.
This is an engineering problem, one that I imagine Facebook will fix over time. The question is how much time, and whether advertisers will have the patience to wait.