Facebook to allow app adverts on its mobile services

Published Aug 8 2012, 13:43 BST  |  By Andrew Laughlin

Facebook has announced plans to allow app developers to advertise their services in the newsfeeds of users of its mobile applications.

In a similar financial model to that used on Google's search pages, Facebook will charge a fee for every click on the ads to download the software.

Facebook's search for new ways to make money has intensified ever since the company went public earlier in the year in the biggest stock flotation in Silicon Valley history.

The firm's share price has slumped by almost half since the float, as Wall Street has become sceptical over the firm's ability to monetise its vast 955 million user base. The stock slump has cost investors about $50bn (£31bn).

In a post yesterday (August 7) on Facebook's Developer blog, the social network invited mobile app developers to sign up to a new way to "grow their business with an ad unit that helps them reach and re-engage their users".

Currently in beta with a limited set of partners, the new ad service is about driving app installs for developers, but also capitalising on the ever-increasing usage of Facebook's mobile services.

"Facebook has increasingly become a way for iOS and Android developers to grow their apps," said the firm.

"In the past 30 days, we have sent people to the Apple App Store and Google Play 146 million times, via clicks from channels such as newsfeed, timeline, bookmarks and App Centre.

"Mobile ads are an additional way to drive people to apps. When a person clicks on one of these ads, if they do not have the app installed they will be sent to the App Store or Google Play to get it."

Participating developers can choose whether they want to target Apple's App Store or the Google Play market on Android devices.

A "power editor" tool will enable them to target customers based on what other apps they have downloaded via Facebook, similarly to the way Amazon presents products to users based on what else they have bought.

If a user clicks on one of the mobile ad links, they will be instantly redirected to the appropriate app store where they can buy the software.

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Facebook intends to charge for every click made, although it will allow developers to set a maximum budget level.

Mark Zuckerberg's company is increasingly looking to mobile as the future of its business, particularly with the ever-growing adoption of smartphones and tablet computers.

Facebook says that 543 million of its active members used the site via a mobile device as of the end of June.

Trials of the ad unit follow the launch of the paid-for "pages you may like" service and sponsored stories, involving an advertiser posting updates on a Facebook user's newsfeed if they or a friend has liked the brand.

In a statement in June, Zuckerberg said that the firm was earning around $500,000 from mobile sponsored stories every day. He also stressed that Facebook users accessing the network on mobile are "more active" than their desktop alternatives.