Facebook is slated to re-launch its mobile ad network at next week's f8 developer conference. Dubbed Facebook Audience Network (FAN), the social network's latest monetization effort aims to help advertisers reach a highly targeted audience with banner ads and custom units.
Facebook began developing the network in 2012 but delayed testing to focus on more lucrative projects. In September 2013, however, the company announced that it will resume testing its network where, this time, the company will work directly with advertisers and app developers.
Approximately one million advertisers currently pay Facebook to promote their ads on the Facebook News Feed. With FAN, advertisers can take advantage of fresh new ground to distribute their advertisements beyond the News Feed to third-party mobile applications.
Mobile ad networks are not revolutionary. Before FAN, Google has already rolled out AdMob and Twitter has purchased MoPub, which currently has more than one billion users. Facebook, however, has a vast storehouse of user personal data that it can leverage to deliver highly targeted advertisements. As long as users are logged in to Facebook, FAN can reportedly recognize the user and deliver advertisements that match the user's hobbies and interests listed on his profile.
FAN allows advertisers to use banner ads as well as custom ads to match the specific app. For example, if Facebook sees a user check in at a museum in New York and he likes eating organic, vegetarian food, FAN will open a fitness app to show an advertisement for a vegetarian restaurant nearby.
App developers can simply insert a code provided by Facebook and use FAN to allow the advertisements to appear.
During the company's first-quarter conference call with analysts, Facebook chief operating officer Sheryl Sandberg said FAN is in very early testing mode, although the company is optimistic about what the future brings for FAN.
"We do see big opportunity here. We think, because we are people-based, we have an opportunity both to provide greater reach for marketers and developers who are working with Facebook, but also improve the relevance of ads people see both on and off Facebook," she said [pdf].
If Facebook's current performance shows anything, FAN might be a very lucrative endeavor for the social network, which earned $2.77 billion in revenue from advertising during this year's first quarter. 59% of that, or $1.33 billion, came from mobile ads alone.
FAN is Facebook's way of saying it wants a bigger piece of the competition. Google currently dominates the mobile ads market, but its grip is slipping as its share of the market slid down two percentage points to 47% in 2013. Google lately announced that it will roll out a new feature that will let users go to an app directly from the search results page.
Twitter also announced a new feature that will allow advertisers to insert ads that blend with the design of a site, which is similar to FAN's custom ad units.
