Facebook VP Envisions Location-based Mobile Advertising
June 19, 2012

Facebook VP Envisions Location-based Mobile Advertising

Lawrence LeBlond for redOrbit.com

Social networking giant Facebook may soon delve into location-based mobile advertising, but the company´s vice president of global marketing solutions stopped short of saying that it is in fact working on such a system, according to media reports.

VP Carolyn Everson said in an interview with Bloomberg that the social network could one day allow advertisers to target mobile users based on their exact location. However, Bloomberg misinterpreted that statement, initially reporting that Facebook was indeed working on a mobile advertising platform based on location.

While Everson won´t confirm that Facebook is moving in that direction, it doesn´t mean that it won´t eventually happen. Everson did imagine how it would look if the company offered location-based mobile ads.

“Phones can be location-specific so you can start to imagine what the product evolution might look like over time, particularly for retailers,” she said in the phone interview with Bloomberg.

Mobile advertising would be a big plus for local businesses, advertising to people who are in sight of their store, offering deals and incentives for would-be consumers, luring them in as they happen by. And competition to reach mobile users could drive up ad prices and earn Facebook more money.

However, nothing has been announced or confirmed since Everson´s Bloomberg interview at the Cannes Lions conference in France yesterday (June 18). She simply said that Facebook was testing new ad products -- which the company has been doing for years.

With a growing number of Facebook users accessing the social network on the mobile front, the company has a lot of location data to rely on, said Inside Facebook´s Brittany Darwell, who said she has ad industry sources that have noted that Facebook is looking into local targeting.

And the January 2011 acquisition of hyper-local targeting firm Rel8tion could combine with the new Facebook Exchange real-time ad bidding system announced last week and give advertisers a new powerful product for targeting customers.

So how would such a system work?

Well, when you open your mobile app or when you publish a location-tagged post, Facebook would learn your location -- if GPS permissions had been given -- and assume you are nearby that location for at least the next few minutes. Advertisers would pre-submit creative elements to be shown to users in specific locations, and Facebook would match you with advertisers based on your location.

As an example, electronics retail outlet Best Buy could set up an ad targeting people within 1,000 feet of its retail locations who Like their store, Like other similar stores, or Like devices sold by the store. When you open your app while walking or driving by one of these locations, you would see in your news feed a mobile Sponsored Story about how your friend had interacted with Best Buy or an offer for a discount from Best Buy that could make you more likely to visit the store as well.

Facebook had reported back in May that “we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven.” The social network noted that mobile ads only produce about one-fifth of the revenue of desktop ads. However, any opportunities to get extra value from its mobile apps are of interest to the firm, but it has run into trouble monetizing personal information in the past.

While Facebook hasn´t given any indication when and if it might release location-based ads, Everson told Bloomberg that it´s “had offers being tested over the last couple of months.”

"More than one-half of Facebook´s 901 million active users visit the social network on mobile devices, and American smartphone subscribers alone spend on average more than 14 minutes per day on Facebook on their phones,” said Ric Calvillo, Co-Founder and CEO of advertising platform Nanigans.

Nanigans customers can use Ad Engine to deliver Sponsored Stories to mobile news feeds on Facebook while taking advantage of Nanigans´ ability to target devices based on demographics including gender, age, and location. The platform´s dashboard will provide brands with data on how users are engaging with their brands or applications via mobile news feeds.

“The mobile marketing opportunity is impossible to ignore, and we´re excited to provide large-scale advertisers the ability for the very first time to reach Facebook users on the go,” said Calvillo.