January 22, 2014 10:29 pm

Facebook data trial paves way for mobile ad network

Facebook has launched a trial using its data to help marketers deliver advertisements on other mobile applications, opening the way for it to establish its own mobile advertising network.

The social media company said it was working with a small number of advertisers and publishers to help them reach people who spend time on apps other than Facebook’s.

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The trial is a sign the social network is considering following the lead of Twitter, the messaging platform, in the use of its data to generate revenue from other properties across the web.

In a blog on its Facebook for Business site, it said the trial was different from past experiments because, instead of working with an outside ad-serving platform, it behaved more like a mobile advertising network.

“Our aim is to demonstrate even greater reach with the same power of Facebook targeting for advertisers both on and off Facebook,” the company said.

Brian Wieser, an analyst from Pivotal Research, said the move was “significant’, with the potential to threaten advertising networks such as Millennial Media and technology company rivals such as Google’s AdMob and Twitter’s MoPub.

“This is more of a one-stop shop competition and they are taking the opportunity because if you don’t, someone else will,” he said.

Twitter bought MoPub, a mobile advertising exchange, last year shortly before it became a public company. The MoPub acquisition will allow Twitter to use the information it collects about users’ interests, based on who they follow, to serve ads across a range of other websites.

Facebook’s ad revenues have soared over the past year, helping allay investor concerns that advertisers would not follow users on to mobile devices. In its third-quarter earnings, it reported that almost half of its total advertising revenue came from mobile devices.

The company overtook Yahoo to win the second largest share of the growing US digital advertising market in 2013, following Google, according to data from research firm E-Marketer. Facebook has a 7.4 per cent share of the US digital ad market, up from 5.9 per cent in 2012.

Ad revenue is expected to show continued growth when Facebook reports its fourth-quarter earnings next week, as small businesses flood to the platform and mobile app install ads continue to thrive.

The company is also experimenting with video ads that play automatically as it looks to gain a slice of the global TV advertising market.

Shares in Facebook, which have risen 88 per cent in the last year, fell 2 per cent in afternoon trading on Wednesday.

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