Three Ways Facebook Can...

Editor’s note: Hussein Fazal is CEO of AdParlor , an ad management and technology company for Facebook campaigns. AdParlor manages over 1 billion daily ad impressions on Facebook for clients such as Ubisoft, SEGA, Groupon, OMD and Starcom. I must say that I have been a little bit disappointed recently in the many , many , many  analysts who have been knocking the Facebook valuation with very limited insight into what is going on with their advertising business. Their revenue potential is as strong as it has ever been and the social network continues to grow its users and roll-out innovative advertising products. While there are many things that Facebook can do to drive revenue related to display, search, and mobile – let’s take a look at three immediate steps Facebook could take to ramp up revenues from its 500 Million+ monthly active users on mobile devices. 1. Show more Sponsored Stories in the mobile news feed – A sponsored story is a piece of news that you would see in your news feed anyways – turned into an ad. It is relevant, social and most people who see a sponsored story wouldn’t even recognize it as an ad. Simply put – sponsored stories work. Looking at campaigns AdParlor has run across numerous verticals show that on average, sponsored stories have a 17% higher click-through-rate and a 38% higher conversion-rate than regular marketplace ads. When sponsored stories were first introduced they were only shown on the right-hand column. They were then rolled out into the news feed on the web version of Facebook. At fmc they announced that they would begin to serve sponsored stories on mobile, and on April 26th it seems to have gone live . However, most users have seen few if any sponsored stories in their mobile news feed as Facebook is slowly rolling this out while monitoring user experience. Facebook can easily flip the switch on this, increasing the volume of sponsored stories it shows in the mobile news feed and increase their mobile revenues. 2- Combining Location & Offers – A while back Facebook attempted to compete with Groupon and other daily deal sites by creating a deals product. They quickly shut that down for multiple reasons – and then re-emerged recently with an offers product. These offers are coupons which any page owner can create for free – and will begin to appear in a user’s news feed on the web. The real benefit will start to roll in when Facebook begins to serve these offers in the news feed on mobile devices to users who are near the store providing the offer. Even though an offer is free to create – if Facebook can leverage location-based mobile offers – page owners will begin to see the ROI and will purchase ads and sponsored stories against these offers to get more distribution beyond what is given for free. Additionally, brands will now have a very clear path to seeing ROI when buying fans. The investment question around the value of growing your fan base – at least for physical location retailers – will be answered. This is sure to increase the ad spend these companies will make on growing their fan base. 3 – Open up mobile device-specific targeting –  There is currently a Facebook broad category targeting option for mobile devices. Advertisers can choose between Android, iPhone, BlackBerry, and Windows Phone. However – this targeting simply means that a user has accessed Facebook through one of these devices. Creating an ad and selecting this targeting will show ads to these users – however they could be accessing Facebook via the web or even a different device. If Facebook were to tweak this and allow advertisers who select iPhone to have ads show specifically ON the iPhone to a user accessing Facebook from their iPhone – this would mark a significant opportunity. Specifically – one of the largest advertising categories on mobile devices is for apps – and the massive gaming subcategory. If Facebook were to enable actual mobile device-specific targeting – iPhone, Android, and BlackBerry application developers could then leverage Facebook advertising to drive application installs – taking the user right from the click of the ad into the corresponding app store. It seems that right now Facebook wants to limit mobile ads to be sponsored stories in the news feed for many reasons – to maintain user experience, to keep users within Facebook, and an effort to make it not feel like advertising. Given this – it is unlikely that Facebook would allow ads from the mobile news feed to direct users anywhere outside of Facebook. However – the opportunity is there – and the revenue potential is huge.

Americans Now Spend Mor...

All those minutes reading your news feed in bed, messaging friends over lunch, and browsing photos on the bus really add up. Time spent on Facebook’s mobile site and apps per month (441 minutes) has finally surpassed usage of its classic website (391 minutes) — for Americans who use both Facebook interfaces according to the latest report from comScore . And that’s actually a big problem for the social network. Facebook usually shows four to seven ads per page on its website, but only a few ads per day in its mobile news feed. That means it makes a lot less money when you visit from your little devices. In fact, this week  Facebook had to warn potential investors  in its IPO that the more people who access it from mobile instead of the web, the worse its business is doing. Can Facebook get away with showing more ads on mobile without turning us off? Way back when Facebook launched in 2004 it was just a website, and it hardly showed ads at all. Over the years it launched a special mobile website called m.facebook.com, and apps for iPhone, Android, BlackBerry, and just about any device you can think of. At first these smaller interfaces were just a way to glimpse Facebook while away from home. But as our phones grew more powerful and Facebook’s apps got better, we could help but friend, chat, and Like no matter where we were. Now there’s 78 million Americans age eighteen and older who use Facebook mobile, and they spend 7.3 hours per month there on average, compared to the total 160 million Americans who use Facebook and spend an average of 6.5 hours on its website per month. That’s a big shift from when the web was king. Facebook realized it had to start making money on mobile, but people hate traditional mobile ads. CEO Mark Zuckerberg didn’t want annoying banners that took up most of your Facebook screen. so Facebook’s solution was mobile Sponsored Stories –stories in your news feed that could appear there anyway, but that companies pay to have appear more prominently and frequently. First showing up in March, these ads are marked “Sponsored, and could be about a friend Liking a company’s Page, a game your friend started playing, or a post by a Page you already Like. Seeing them occasionally isn’t bad, but if Facebook shows too many it could make people angry and less likely to visit. Now Facebook must walk the tightrope. Inject too many ads in the mobile news feed and people will stop visiting, inject too few and it will lose money. No pressure, there’s just a half a billion mobile users watching.

KeKu Promises Cheap, Hi...

KeKu is a VoIP telephony startup that has quietly build a global platform during its beta phase. Now, the company is ready to come out of beta. At its core, KeKu is pretty similar to services like Rebtel and even Skype, as it focuses on letting you make cheap international phone calls and also offers free calls between its own users. KeKu, however, puts a stronger emphasis on what it likes to call “any-to-any” calling than most of its competitors. This means that you can use it to make calls from your landline, mobile phone or the company’s free Android or iOS apps to call any phone number in the world (a BlackBerry app is also in the works). One of the service’s most interesting features is that it allows you to set up local numbers in over 40 countries that you can then assign them to your international contacts (the company actually has a patent for this technology). Thanks to this, you can use your landline or mobile phone to call a local number you have assigned to a given contact and then have KeKu automatically connect this call to the international number. It’s worth noting that Skype, which offers a similar service under the name “ Skype To Go ,” only provides this service in 23 countries. Overall, the service’s prices for paid calls are comparable and often somewhat cheaper than its competitors’. KeKu also lets you send free international text messages. For users in the U.S. (and those who make many calls to the U.S.), KeKu also offers an unlimited plan for calls inside the U.S. for $19.99 per year. As KeKu’s CEO Manilo Carrelli told me earlier this week, his team, which includes a number of telecom veterans, the company is especially proud of its proprietary routing system. The team’s focus, he said, is on providing the highest possible call quality and its systems ensure that calls are always routed based on network quality. He also stressed that he wants the company to be something akin to a “Swiss Army Knife of calling,” which explains KeKu’s focus on a global market and support for good old landlines. During its beta phase, the company signed up over 400,000 subscribers worldwide. While the company wouldn’t reveal any precise numbers, Carrelli told me that the “majority” are paying users.

Android: 48.5% of the U...

According to Nielsen, Android OS had nearly half of the U.S. smartphone OS market in the first quarter of 2012. Google Android OS claimed 48.5 percent of smartphone owners in the first quarter, followed by Apple iOS with 32.0 percent and RIM BlackBerry with 11.6...

Telefonica Tries Its Ha...

Telefonica has been working hard to make sure it remains a relevant force in mobile as big companies like Apple and smaller app developers like Twilio all swoop in to eat the carriers’ proverbial lunch — offering mobile services to consumers and “owning” that customer relationship: that’s seen the company invest heavily in mobile payments operations like Boku, establish accelerator programs and generally look to remain on the cutting edge of whatever the mobile world will bring us next. The latest in that trend is the launch of a new app from Telefonica, TU Me , which will see the carrier taking a big step away from its traditional paid business model to offer users texts, voice calls, messages, and location and photo sharing — all free of charge (excepting WiFi or data plan usage, of course). With the app available worldwide from today in Apple’s App Store, the idea is to get as many people as possible using it, and then monetize it along the lines of how Skype has done — through the rollout of eventual value-added services. That could mean enhanced communications, but Telefonica tells me that it will likely also mean adding mobile advertising and other ways of generating revenue. Telefonica says that it has plans to introduce further direct-to-consumer services under the TU brand “over the coming months.” It’s fairly vague right now on what those can be, describing them only as “enhanced communications services which its O2, movistar and Vivo businesses will make available to customers as part of their bundles.” One thing that seems to point to is that while TU Me is free, these future services will either be paid offerings — or services that are offered as perqs for paying subscribers only. The TU Me app works similar to Whatsapp — and of course Skype — in that it works irrespective of what carrier you use, with the different interactions flowing in a timeline. Unlike those apps, for now it will only work on iOS devices, although given that Telefonica has the most brand recognition in regions like Latin America and Europe, there is all likelihood that we will also see versions of this developed for BlackBerry and Android devices, both of which are popular in both regions. Given that it also incorporates location-sharing, this also opens the possibility for Telefonica to work in services like offers and location-based advertising. These are already areas where the company has developed services — specifically in its O2 business in the UK — and since the company announced a new digital division, Telefonica Digital, it has had a mandate to roll more of these services out globally. Similarly, you can also see the company’s strategic investment in BOKU coming into play more in a global service like TU. Another area where Telefonica may choose to offer charges in future is for storage: the app’s data is all cloud-based and presumably there will be a limit to how much data you can store there, and for how long, for free. Telefonica is not the first carrier to look at ways of offering services beyond its own subscriber footprint. T-Mobile last year launched Bobsled, a Facebook app that let any U.S. user make free phone calls to their Facebook friends. That proved to be controversial when Facebook decided it looked too much like a service it was offering itself — and now Bobsled only works outside the social network. However, just as T-Mobile’s Bobsled never really took off, there will still be a big challenge ahead for Telefonica to get critical mass around TU Me. Still, it’s always great to see an old dog try a new trick — and there’s every chance that this could be the one to stick.