Facebook is now automating mobile-ad buying to make the process easier and faster.
It's a big move for a company that 's admitted monetizing its massive mobile traffic is among its biggest challenges and who's stock price continues to tumble thanks in part to those fears.
As of today, Facebook is opening up its mobile-only sponsored-story placements to both its self-serve tool Power Editor and to third-party Facebook ad sellers.
"It's basically mobile ads for the masses," said Simon Mansell, CEO of one such Facebook ad company, TBG Digital. "It now enables all the rest of the clients that maybe couldn't afford previous levels to access mobile-ad inventory."
Since mobile ads became first available in March, mobile-ad inventory was mostly accessible to big advertisers buying into premium ad packages, including those new ad placements called reach generator. Reach generator was only open to advertisers with a minimum of 500,000 fans, said Mr. Mansell. That could add up to total costs of $125,000 per quarter.
With the new changes, Facebook mobile ads are now open to a much larger pool of advertisers with any size budget, which bring in the majority of its $3.7 billion in annual revenue today.
EMarketer projects that 60% of Facebook's ad revenue comes through its self-serve tool and companies like TBG. "That's probably going to increase as we see Facebook opening up more ad slots to [these sales tools]," said eMarketer analyst Debra Aho Williamson.
It also opens up Facebook mobile ads to small- and medium-size businesses that use the self-serve tool. Borrell Associates expects the group to spend $4.5 billion on mobile marketing this year in the U.S. alone.
In regulatory filings ahead of its initial public offering, Faceboook cautioned that consumers' appetite for its mobile app would soon exceed use of its website and could prove damaging to its business. At the time, Facebook was not generating "any meaningful revenue" from use of its mobile products.
"We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected," the company said in an early May filing.
The company had nearly 500 million monthly active users of its mobile products in March.
That advertisers can now buy mobile-only if they so choose to access that audience, a new breed of advertisers may take advantage, like app developers or gaming companies looking to snag users on phones or marketers in industries such as quick-serve restaurants looking to reach people on the go.