Facebook Inc. (NASDAQ:FB) has been working on developing its advertising revenue while also trying to improve its revenue growth in the emerging world of mobile. One way the social-media behemoth is trying to improve itself in those areas is in off-site advertising – it’s a concept that Facebook Inc. (NASDAQ:FB) recently announced it was testing.
The test involves an advertising network, where Facebook Inc. (NASDAQ:FB) serves ads on mobile apps and other Web sites outside of its own. The test was confirmed by the company Tuesday. For the test period, Facebook will be working with a select group of advertising exchanges which have existing relationships with publishers, and those publishers would sell Facebook ads to third-parties that are Web site and/or mobile apps. Those ads are very similar to ones that are seen on Facebook’s Web site, but they’re just optimized for the smartphone or tablet or the particular Web site.
There are some moving parts to this concept, but the benefits may likely fill not just Facebook Inc. (NASDAQ:FB) needs for monetization. While these ads could get more visibility in other channels while Facebook transitions into a “mobile first” company, as Mark Zuckerberg stated in his TechCrunch Q-and-A session last week, the third-party app developers can also benefit – a Facebook Inc. (NASDAQ:FB) off-site site for a third-party app may redirect those who click on it to the App Store from Apple Inc. (NASDAQ:AAPL) or Google Inc. (NASDAQ:GOOG) Play, where users download apps. This may be a better opportunity for those developers to get traffic and app downloads than the riskier concept of getting their advertisement to show up on Facebook users’ News Feeds on a regular basis.
There is certainly more to this, and this may not qualify as an official network but more like a focus group. If and when Facebook Inc. (NASDAQ:FB) develops its own ad network, an investor in Facebook stock – like hedge-fund manager George Soros of Soros Fund Management – will likely see that Facebook has fitured it out so that it will succeed – not riding on hopes.