If Facebook is going to make its investors smile again given the battering its shares have received since its recent IPO, it’s going to need to find a way to monetize its 400m+ global mobile users.

Those using Facebook on their mobile used to enjoy an ad free experience.  All of that changed 3 weeks ago when Facebook introduced Sponsored Stories in the newsfeed specifically for mobile devices. 

So how are mobile users responding to the new service?

Well, some metrics are starting to appear from 3rd party ad providers, and the early signs are encouraging. On the whole, the findings are that mobile ads are delivering considerably higher click thru rates (CTRs) than any form of advertising on desktops.

For  example, SocialCode recorded a CTR for mobile ads of 0.79%. That compared with an average CTR of 0.148% across all 5 placement types they studied – a 500% plus uplift.

AdParlour recorded similar results, with a CTR of 0.895%, more than 25 times the average for standard Facebook ads. TBG Digital recorded even more encouraging figures, with a CTR of 1.14%, almost twice as high as the results for the desktop newsfeed (0.588%) and more than 13 times higher then that observed for advertising in the desktop newsfeed and sidebar combined (0.083%).

The only fly in this particular ointment is that those mobile clicks are not converting into likes at the same rate as for desktop users.  Ad Parlour noted a conversion rate of 55% for mobile users vs. 72% for desktop users, although clearly this small fall in conversion is more than made up for by the big increase in CTR.  In addition, CPMs are higher than for desktop advertising – a factor of limited inventory and the higher CTR.

Of course, it’s still early days for mobile advertising for Facebook and novelty will be playing a part – the ads will be new to users and many clicks will be curious ones. In addition, in the early days, competition will be low and bid prices won’t be driven up. In a few months time, the CTR differential may not be so stark.

And, of course, it should be no surprise to us that Facebook advertising on smartphones delivers better results than on desktops – the same phenomena has been observed in the fields of online display and search.

Still, it’s encouraging news for Facebook and for advertisers looking to reach Facebook’s considerable mobile audience. And it’s encouraging news for premium and luxury advertisers in particular, as we believe this form of advertising will offer a more premium and exclusive experience for consumers.

Facebook advertising on desktops can be a dangerous environment for premium brands as it’s so widespread and low quality. Retaining an air of exclusivity isn’t helped by a billion other ads begging people to like them. However, mobile advertising might just prove the answer as the ads are bigger in size and can lead ‘interactors’ to a more immersive experience very quickly at a time when consumers are more likely to be killing time and likely to engage.

By: Neil Cunningham

Posted in Mobile, Online | No Comments »

In a move which might be seen as unexpected for a company more renowned for its software rather than its hardware, Microsoft last week launched its Surface family of tablets.

And the launch shows that Microsoft has a fundmentally different vision as to the future of mobile computing than its rivals over at Apple. That’s because the Surface is an unashamed hybrid – bringing together the intimacy and portability of a tablet with the keyboard and computing power of a laptop.

Tim Cook, CEO of Apple, is dismissive of the concept, seeing hybrids as worthless products that ‘converge a toaster with a refrigerator,’ but if Microsoft is onto something, then if may carve out a successful niche for itself in the tablet market.

The most innovative feature of the Surface is that the pressure sensitive cover doubles as a keyboard and trackpad.  In fact, not one but 2 keyboards – one touch sensitive, but a much more tactile experience than trying to type on a touchscreen, and one with keys that actually depress, albeit it much thinner than a standard keyboard. This feature, combined with a kickstand which allows it to stand upright, means the Surface can be used as a tablet and notebook/laptop. Certainly, the higher end model, which is likely to be priced above the iPad, will offer the computing power that may convince business execs to do away with a laptop and just opt for this hybrid device.

And the fact both versions of the Surface will run Windows – Windows RT for the lower end model and the yet to be launched Windows 8 for the higher end – may well be attractive to businesses looking to integrate new devices with their existing Windows run systems.

Will it succeed in dethroning the iPad? Probably not. There are too many unknowns at the moment – most notably price, but also key features such as battery life and connectivity – will it be wifi, 3G or both? Also, how will Microsoft’s yet to be released Windows 8 OS match up against iOS for the iPad?  And Apple’s cohorts of loyal fans are unlikely to flock to the product of one of its key rivals.

But the Surface certainly has a chance at carving out a niche for itself and putting a dent in Apple’s share in a market in which it’s been unassailable to date.  And what the Surface will do – along with the Google tablet rumoured to be launching this week – is to help fuel the continued and rapid growth of tablet penetration.

Tablet penetration in the UK is estimated at about 5%, more than twice the level of this time last year.  And if the UK follows the lead of the US, then the sky’s the limit.

eMarketer has estimated that the number of tablet users in the US will reach 70m by the end of this year - that’s 20% of all US consumers and proof that the tablet has moved beyond the Early Adopter phase. And, of course, penetration amongst affluents in both the UK and US will be well ahead of these headline figures simply because of their greater enthusiasm for technology and their greater ability to afford the products.

And eMarketer has revealed exactly what consumers do with their tablets too – they shop, and they shop quite frequently too, from the comfort of their sitting rooms and bedrooms. According to data released by rich media marketing platform provider Zmags in January 2012 and reported on by eMarketer, over 50% of US tablet users said they shopped using their tablet at least once a week, with 12% saying they shopped with their tablet daily.

These trends are being demonstrated in mcommerce stats in the UK.  A recent report revealed that in terms of their share of mcommerce, tablets are already rivalling smartphones despite having only a fraction of the penetation. Clearly, the future of mcommerce lies in the larger screen of the tablet, or a tablet hybrid, rather than the smaller screen of the smartphone.

The tablets screen size and resolution, portability and intimacy are the key behind its success – consumers can use it to shop when and where they want and can react immediately to interest fired by ads in other media such as press, magazines and TV without having to troop upstairs to turn on the PC.

But premium and luxury retailers need to ensure that they’re delivering an online solution that is optimised for tablets to capitalise on this trend. And that’s more than just delivering an existing website in a form navigable to tablet users - brands need to think about how they can leverage the unique features of tablets and the environment in which they’re being used to their advantage.  As Compuware reported a few months ago, a poor web experience on a tablet will tarnish users’ impressions of all your other web channels. And as the proportion of tablet users amongst your customers grows, that could have a significant impact on your bottom line.

By: Neil Cunningham

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