Facebook's Push to Increase Mobile Ad Revenue

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Oct. 2 (Bloomberg) – On today’s "Drill Down," Cory Johnson takes a look at Facebook's push to increase mobile advertising revenue. He speaks with Emily Chang on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

The day.

They said this is three out of 10 in terms of its level of importance to facebook.

What do you think?

Instagram being 10. i think we don't know how big this is.

I think when we look to the facebook ipo, when they went public, the company was very forthright saying they don't have meaningful revenue in the mobile arena and that is something they were going to develop.

You can see the slowdown in growth in their numbers.

That has turned around and the stock followed that turnaround.

When we look at their mobile business, the place where they have seen substantial mobile revenue, interestingly and cleverly, is by advertising apps.

They have a successful business about putting ads about apps on the phones of mobile users, and the clicks on those ads have led to downloads.

The problem is it has not led necessarily to app usage.

How big of a change could this be in terms of their bottom line, the percentage from mobile ads?

Who knows the bottom line, it depends on how much they spend.

What they are doing here is expanding the potential marketplace into which they can sell mobile ads.

If you think about it, they have a one-off shot.

If you have an app with an opentable, clicking on that one app and getting somebody to download it once is a one-time sale.

Now they are creating the opportunity, they are creating inventory of places to sell ads.

They can convince the user to click on the ad many times even after they have downloaded the app.

Facebook said 66% of the apps that are downloaded are used one to 10 times after they are downloaded.

With ads pointing to the apps store, they were getting basically one hit from the advertiser.

Now the chance for the marketer, this new tool is inside of the apps, giving them more places to sell ads, giving them more functionality.

That could open up a new place for them to grow ads, to have been more involved in the infrastructure of advertising.

We have been comparing twitter with facebook, anticipating twitter's financials to be revealed.

What is interesting is twitter advertising and how much users go back to twitter.

What we saw with google is people go to google, spend the dollar on google one month, next month they spend $1.50, the next month they spend three dollars.

We have not seen that from facebook.

I don't know if we will see that from twitter.

Are people using the advertisements on twitter increasingly because of the efficacy?

We are expecting the s-1 from twitter later this week.

I'm waiting.

Cory johnson, editor at large, thank you.

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