Facebook on Smartphones: Leads Mobile Engagement

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According to comScores’s new Mobile Metrix 2.0 report, released on May 7, 2012, Facebook ranks as the most engaging media property among U.S. Smartphone users. The average Facebook mobile user engaged for more than 7 hours in March, 2012. That’s good and bad news for Facebook. The good news is that Facebook’s overall usage and engagement continues to trend up and users spent more time on Facebook in March 2012 than in February 2012 on Smartphones.

The bad news is that Facebook users are starting to spend more time on Facebook on their Smartphones than they are on their desktops (includes laptops, pads, etc.)

Problem is, Facebook is getting pennies on the dollar for mobile ad revenue compared to desktop ad revenue. We talk about this in our recent Blog Post “Never Underestimate the Zuck (Facebook Instagram deal)”. So it seems that as the popularity of accessing Facebook on Smartphones increases, the popularity of accessing Facebook on desktops is declining.

On Facebook, the top ranked mobile media property by engagement, 80 percent of time spent in March 2012 was represented by App usage compared to 20 percent via Browser

Analysis of the share of time spent across Apps and Browsers revealed that even though these access methods had similar audience sizes, Apps drove the lion’s share of engagement, representing 4 in every 5 mobile media minutes. Analysis of the top properties also revealed widely varying degrees of time spent between App and Browser access methods. Also, the Facebook mobile App ranked within the top five Apps on both iOS and Android platforms, securing the #3 spot among iPhone users (80 percent reach) and the #5 position with Android users (68.9 percent reach). Generally, social networking proved to be a particularly popular activity on smartphones with Facebook once again leading the pack among social networking brands (Twitter, LinkedIn, Pinterest, etc.).

Facebook released an interesting disclaimer in its recent IPO filing document

“If users increasingly access mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, our financial performance and ability to grow revenue would be negatively affected.” (Excerpt from Facebook’s Pre-IPO doc). So, Facebook is obviously tuned into the phenomenon of increased mobile usage=decreased desktop usage and is working on their mobile strategy to increase revenue from mobile. We think that at least part of Facebook’s mobile revenue will be driven from the way that Facebook re-implements Instagram and how it accesses Timeline (where some of the ads are now, and more seem likely to come). On the other hand, maybe Facebook will announce a new Facebook Mobile Phone soon. If they do that post-IPO, that announcement could send Facebook’s then public stock soaring 150%. Hmm. Sounds like a plan. We await future Facebook announcements with great anticipation (stay close to this one)!

Never Underestimate the Zuck (Facebook Instagram deal)

Posted Leave a commentPosted in Innovation, Random Acts of Progress, Visionary

Facebook recently bought Instagram for one billion dollars. Instagram is the fast, beautiful, fun way to share photos with friends and family. Instagram enables you to snap a picture, choose a filter to transform and theoretically improve its look and feel, then post to Instagram’s website. And you can share to Facebook, Twitter, and Tumblr too – it’s photo sharing, reinvented, and super easy to do. But, still, it’s reinvented; not exactly new or groundbreaking. So, why exactly did Facebook buy Instagram and why does that matter?

Facebook doesn’t need Instagram’s 30 million users.

It already has 850 million of its own. And Facebook’s ultra-simple built-in photo app is the most popular app on Facebook. So, why? Is Facebook predicting that its user acquisition rate will slow down? Don’t think so. They’ll likely hit a billion users sometime in the next year just on autopilot. Facebooks upcoming IPO guarantees that they’ll be spending most of their time and treasure on increasing revenues, not users. Of course, most of that is ad revenue. Instagram comes with users but no revenue and no obvious way to monetize their user base.

The Facebook Instagram deal looks like it’s a pure mobile play.

But, Facebook already has lots of mobile users. Well over 400 million users per month use Facebook on their mobile devices; and Facebook offers mobile apps on just about every platform. Problem is, Facebook is getting pennies on the dollar for mobile ad revenue compared to desktop ad revenue. In light of the upcoming IPO, Wall Street analysts are surely looking at this acquisition from the PoV of “how much revenue does the acquisition bring to the table v. the expense of keeping Instagram running and of course the one billion dollar price tag?”.

OK, this might be a bit of a stretch but maybe not. Facebook doesn’t own a piece of the image acquisition part of the mobile market. Instagram does. So, maybe Facebook is thinking that instead of Instagram users posting the images to Instagrams website, that users will start posting them to Facebooks timeline. That would result in more opportunities to serve ads to the desktop and of course that would increase revenues. I for one would like to see Facebooks spreadsheets on that one though since Facebook still has to recoup their one billion dollar investment and that will not be easy.

Maybe Facebook doesn’t have much of a choice?

Facebook wants a big piece of the mobile market and their current mobile offering may take too much time to develop into a revenue-generating service. Mobile image acquisition isn’t part of Facebook’s current mobile service but maybe that’s exactly what they need right now. The Instagram purchase, complete with business infrastructure and 30 million users, would instantly accelerate Facebook’s market share of the mobile market, and interface with Facebook in a way that increases Facebooks ad revenues on the desktop. Now this could be a Facebook mobile service that makes Wall Street happy. Right?

So, maybe the new Facebook Instagram service will enable users to quickly and easily take beautiful pictures, seamlessly share them to their Facebook timeline and friends, and Facebook gets to serve more ads to the desktop where they make their money. Maybe this is starting to sound like a match made in heaven. Never underestimate the Zuck.

Graphic created by: Online MBA Programs

Return to top: Why Facebook Bought Instagram and Why That Matters?

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Infographic: Facebook's IPO – What You Need To Know

Posted Leave a commentPosted in Random Acts of Progress

Our obsession with Facebook has propelled it to insane heights.

What does this mean for the company? Money. And lots of it.

Rumers of Facebook’s IPO are flying and Wall Street is expecting a record-shattering amount of cash to be raised.

How do the projected numbers break down?

Here are some interesting answers and projections on the proposed upcoming Facebook IPO.

Source Information: AccountingDegreeOnline.net

Return to top: Infographic: Facebooks IPO – What You Need To Know

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