Facebook Launches Mobile Ad Network, Meets Our Predictions

Following our post about Facebook’s next moves in mobile, today it launched its mobile ad network at the f8 conference. As expected by many, this will be an “off-site” network that applies Facebook’s audience targeting to third party apps. It will be called the Facebook Audience Network (FAN).

Ad targeting will presumably be linked through Facebook Connect, so it will shine among apps that use that utility. As we speculated last week, this could grow even greater relevance if authentication and user tracking happens among apps that apply social sign-in at the OS level.

Some of the other features announced today that we called right:

— The ad network will include mostly app install ads at the onset, which have been a cash cow for Facebook.

— Format options will mostly be banners and interstitials, as opposed to the (native) news feed ads that Facebook applies on its own app.

— More native ad formats — those that merge with a given app’s content format — will develop over time, but only through direct relationship with Facebook (presumably limited to the largest campaigns and ad spend).

— The ad targeting factors will be mostly behavioral, as linked to your Facebook activity and profile (per the point above).

— Location targeting tied to the new Friend Finder feature is not included, as many speculated it would. As we explored last week, that is something completely different, but potentially coming later to FAN.

Overall, the big story here is that this will allow Facebook to grow mobile revenues while fulfilling it’s core goal of not over-commercializing it’s flagship app. It tried versions of this approach a few times but the timing is now right for lots of reasons. Quoting our analysis last week:

“But ultimately the beauty of an off-site network is to use all of this data and positioning to continue milking demand for mobile ads, without killing the cow. Instead of over-monetizing its own core user experience, it can do so in someone else’s back yard (albeit with a publisher rev share).”

There will be lots yet to unfold here and we’ll continue covering it closely, including at our big Leading in Local conference in Atlanta next week. We still have discount codes if you’re on the fence (email me at mbolandATbiakelsey.com). Hope to see you there.