Facebook is testing a major new advertising feature that may exponentially expand its ad business. In an inconspicuous blog post in the Facebook for Business section, the social network announced its plan to test ads in mobile apps.
This might not sound like a big deal, but it could elevate Facebook’s status enormously in the advertising game. And even though it seems like this news is only pertinent to people in suits who like Mad Men too much, it will affect you too. Here’s what you need to know:
These aren’t ads FOR Facebook. They’re ads FROM Facebook.
An important distinction—this announcement doesn’t mean you’re going to see Mark Zuckerberg’s face when you open Candy Crush. This means you will see advertisements from a select group of Facebook’s advertising partners on all sorts of apps.
Does this mean I’ll see more ads in my News Feed? Damn it.
No. Mercifully, no. These are ads that Facebook will put in other places. This means you’ll see more ads that Facebook has placed on different apps you use. It won’t affect the quantity of ads on Facebook itself. Instead of serving as an ad platform, this is Facebook testing the waters as a company that matches advertisers up with other platforms.
Where will these ads appear?
Facebook hasn’t revealed which advertising partners or which apps will be part of the test, but it will take place on iOS and Android apps. (So Windows Phone users, you’re in the clear, but also: get a new phone.)
When will these ads appear?
They’re already out there (cue Jaws soundtrack).
Is this is the same thing as the project Facebook is working on last year, with third-party ad developers?
This is a whole separate thing.
Last year, Facebook told Business Insider it was prepping an ad network with third-party developers. That is likely still happening, but this test is only within Facebook: no external advertising platforms are involved.
Why is Facebook doing this?
Facebook already makes a huge chunk of its revenue off of mobile ads, and that number rose steadily in 2013. But without overburdening its users, there’s only so many ads Facebook can sell to go on its own services. If Facebook creates its own mobile ad network, the opportunities for placing ads on different apps could bring in a major new stream of revenue. If it goes well, this could skyrocket mobile revenue. And if Facebook is the main app you use, then at least you can be relieved that ads aren’t going to increase.
Will this work?
Facebook isn’t the only network doing this—Google and Apple are already established presences, and even Twitter has also created its own mobile advertising network. So it’s not a wide-open field, but Facebook is a massive player in the app world, with its core apps Instagram and Messenger both topping most-used charts. Advertisers will likely be attracted by the company’s obvious fluency in mobile.
Bottom line for most users: this strategy means Facebook can pursue ad money without overloading the News Feed and sidebar and app with ads. It already feels like that's happening, but this is supposed to curb, maybe even lessen, what's happening.
Photo via Flickr/Sean MacEntee