After a continuous swirl of rumours speculating the arrival of the Facebook phone, Mark Zuckerberg finally unveiled his mobile strategy last week.
Rather than building its own smartphone, as originally anticipated, Facebook took a far more intelligent approach and launched Home, its new software for Android operating systems. The app will see users’ traditional home screen and menu replaced with ‘CoverFeed’, which displays Facebook notifications, images and message.
So why the decision to create software rather than hardware? Free to download, the app can effectively be accessed by any of the 680m mobile users who own an Android device. As Zuckerberg said himself: “We’re not building a phone, and we’re not building an operating system. A great phone might sell 10 or 20 million units. Our user base is at about a billion. Even if we made a great phone, we’d only be serving one or 2% of our base.”
Last week, EMarketer reported that it expects Facebook to generate $965m in US mobile ad revenue in 2013 – 2.5 times the $391m in 2012. Facebook has made no attempts to disguise its plans to monetise the network through mobile and so whilst Zuckerberg hailed Home as being designed “around people, not apps”, the new venture is almost certain to include a sophisticated advertising model with opportunities for marketers.
A day after the launch, Zuckerberg told a number of reporters during a Q&A session of plans to host advertisements on Cover Feed: “There are no ads in this yet. I’m sure that one day there will be,” he said.
Forrester’s Charles Golvin said in a blog post: “Since Facebook’s business model is almost exclusively advertising-based, Facebook must envision a radical shift in the future chain of commerce — moving awareness and discovery from search to social, powered by Facebook’s trove of personal information to enrich the value of the ads it enables. Such a disruption in behavior will take a long time to obtain.”
However, some have speculated that this ramped up advertising model may annoy already frustrated users. Jan Dawson, chief telecoms analyst at Ovum, said of Home: “It will allow Facebook to track more of a user’s behaviour on devices, and present more opportunities to serve up advertising, which is Facebook’s main business model. And that presents the biggest obstacle to success for this experiment: Facebook’s objectives and users’ are once again in conflict. Users don’t want more advertising or tracking, and Facebook wants to do more of both.”
Intelligent marketing
So how can marketers exploit the potentials of Facebook Home without alienating customers?
Jonny Rosemont from DBD media said in a blog post: “Facebook is going after everyone. For marketers this obviously means greater influence potential through Facebook. There will be unique advertising opportunities on the Cover Feed and developers will be able to do many an interesting thing. Facebook Page owners will also need to consider their mobile content strategy if they haven’t already done so.
“This launch also raises an interesting debate about data. Facebook will be present wherever you are, it will know what you are doing, where you are and whom you chat to at those moments. Better targeting? You betcha. Another privacy storm is already opening up.”
James Hilton, M&C Saatchi Performance Global CEO, added: “The fact that Facebook Home is a hybrid of an app and operating system means that there will be much deeper data to enable more targeted advertising. The overlaying of Google Home on top of Android means that we can rapidly factor the new opportunities into our media plans. Also, having social at the centre of the HTC First’s functionality may also trigger deeper social integration by other OS & handset developers, meaning better opportunities for advertisers across the entire mobile ecosystem.
We’re very interested to see how Facebook will weave advertising into the Google Home experience as people will possibly transition their attention away from the dedicated app into the more integrated, overall experience.”
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