Google does it, Apple does it, now Facebook plans to do it

Alex Leslie - 06/01/12

After a false start, which involved a dramatic shake up in the global advertising industry, mobile advertising is now ready for a screen very near you.

Google recently reported that revenues from its mobile advertising business will generate $2.5 billion a year for the company. Apple has again lowered its threshold for accepting advertising campaigns, according to the Wall Street Journal. The company originally asked for a minimum spend of $1 million, then lowered it to $500,000, now it has dropped it to $400,000. Marketers have been frustrated by Apple’s closed shop approach, with high prices and strict controls over advertisement creation limiting take up.

Apple’s pricing model is being reviewed and training introduced for the ‘new’ medium, says the WSJ. Meanwhile caps are being introduced to limit the costs for advertisers. Apple charges $10 per thousand views, but $2 for every click or tap. Google is more flexible, charging between $4 and $12 per thousand views.

Enter Facebook, with its 800 million users. Looking for revenue streams ahead of its IPO, the company is reported to be looking to launch mobile advertising in March 2012. One major potential advantage for Facebook is the community effect.

However, its ‘sponsored stories’ approach has been questioned – is it ethical to use the fact that customers ‘like’ a company or brand as part of that company’s advertising campaign without specific permission? Elliot Schrage, VP of public policy at Facebook was embarrassingly unsure of the answer when asked by a BBC reporter, replying “let’s pause” and indeed pausing for several silent seconds in response to a probing question on the subject.

Whether or not Facebook goes with the sponsored stories approach, presumably a marketing committee’s response to the highly successful Amazon ‘recommendation’ technique is in question. What is not in question is that with a ready profiled audience of 800 million consumers they are in a powerful position. That, and the fact that mobile advertising is here, now, and some seriously creative people are on the case.