Will More Mobile Facebook Ads Be Annoying Enough To Drive Users Away?

Earlier today, Facebook’s very own Mark Zuckerberg and the site’s other head honchos held a conference call with investors to discuss the company’s first earnings report since it went public back in May. Given the stock’s not-stellar performance and investors’ concerns about Facebook’s ability to actually, ya know… make money, the Zuck did his best to liven up spirits by saying the company is beefing up its mobile ad strategy. Which yes, means ads for Facebook users on their smartphones and tablets. Let the clogging begin.

Reports claim that the reason so many big investors pulled out of, or decreased orders on, the Facebook IPO before it even began is that the company had not done much to monetize its massive mobile audience.

So, in apparent response to those worries, Zuckerberg opened the call by saying that mobile is now among the company’s “top priorities,” and that they’re starting to figure out how to generate revenue from mobile ads. It’s important, as he notes, because mobile users are about 20% more likely to use Facebook on any given day than other users.

Facebook is already making money — about $1 million per day — from “sponsored stories,” according to chief operating officer Sheryl Sandberg. About half of that comes from mobile ads, says the company.

“Ad impressions continued the recent trend of growing more slowly than users as more of our usage is on mobile devices. This trend is particularly true in markets such as the U.S. where smartphone use is expanding rapidly,” she said. She added that that sponsored stories were “the cornerstone of mobile monetization” strategy.

Facebook seems pretty excited about sponsored stories, which is a bit funny, as those same sponsored stories have already been the subject of privacy lawsuits filed by users. People claimed the ads turned them into marketers, unwittingly peddling products and companies to their friends, without compensation. Facebook now lets users control what content can be used as sponsored stories.

Meanwhile, chief financial officer David Ebersman said it would be difficult to forecast exactly how much money can be made from the sponsored stories ads in the Facebook Newsfeed, since they’re in the “early days of growth,” and that it’s hard to see at this point the “sizable impact on what kind of performance we can deliver.”

Now the real question is — will an increase in mobile ads turn off formerly faithful Facebook users?

The controversial sponsored stories have already been a legal and PR problem for Facebook, so it seems likely that any additional ads popping up in mobile Newsfeeds is bound to tick off many a user, especially when these ads eat into the already scarce real estate on a user’s smartphone screen.

To Zuck and his cronies, we say: Good luck not alienating millions of users.

Of course, it’s possible that additional ad revenue from customers who aren’t put off by ads will make up for those that are driven away by the intrusion.

As we pointed out, even before the Facebook IPO became of the year’s most-hyped non-events, we discussed our doubts that Facebook would be able to transition smoothly from a basically ad-less free-for-all funded by venture capital into a profitable mega-site that pays back investors through increased ad revenue. Its past reluctance to look and feel like a traditional website — part of what made it so attractive to users — appears to be what has thus far kept Facebook’s stock value from reaching its potential.

Case in point — The conference call comes directly on the heels of news that Facebook shares fell today more than 10%, almost 40% less than its IPO price.

Live Blogging Facebook’s First Earnings Call [Wall Street Journal]

Previously: Facebook’s Cash Cow Zynga Blaming Some Of Its Gaming Problems On The Social Network

Comments

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  1. Bort says:

    I may be the first person to comment since we got commenting back, unfortunately I don’t have much to say

  2. deniedbeef30 says:

    Wow. Without comments Consumerist was kinda boring. So glad they are back!

  3. padarjohn says:

    Mobile Facebook is enough to drive me away. The app that I can’t uninstall from my phone was the most annoying thing I’ve ever encountered. I had to clear my info from it to finally stop it. No mobile facebook for me.

    • longfeltwant says:

      Agreed. It pisses me off that there are ANY apps I can’t remove, but Facebook? Srsly? Why the heck would that be unremovable? Pure, unadulterated greed is why.

    • 180CS says:

      Before I ever buy a new phone, I make sure it can be easily rooted. First thing I do out of the box? Root it, install root uninstaller, and then uninstall that preloaded bloatware.

  4. Mark says:

    I don’t facebook or twitter. Why would someone be interested in someone they do not know, quotes and saying is beyond me. There’s your kid show them interest….if they can stop twitttering or face….booking….????

  5. valen says:

    I think Facebook evolving like pay TV services. It started off as a commercial free service that had decent content. However, over time, the content quality decreased and invasive ads started appearing everywhere. This behavior results in a “customer monetization” feedback loop which enhances the undesirable characteristics (ads) while marginalizing the desirable characteristics (quality). The result: A mediocre service that is barely worth using or paying for.

    • nishioka says:

      > However, over time, the content quality decreased and invasive ads started appearing everywhere.

      Considering content on Facebook is almost purely driven by its users – if you think the quality of the content has gone down, that speaks more to what you think of your friends than what you think of the service. Not entirely Facebook’s fault there.

  6. mattyb says:

    The thing that is driving me away from Facebook more than anything is all of those fucking inspiration quote things and “click if you (agree, like, appreciate, know what this is blah, blah, blah)” photos, and all of that other garbage. Those someecards are getting old too. Whatever happened to status updates and pictures. Thats all I want.

    • Carlos Spicy Weiner says:

      FB is seriously devolving, except the welcome “Edit:” feature for posts. Timeline is a joke, the site has lots of glitches and privacy guesswork. Yawn…

    • Chuft-Captain says:

      Sounds like your problem is less the site, and more the people you have as friends.

  7. PupJet says:

    I grew bored of Facebook when it first started and I look at it and…well, I’m still bored of it. I dislike the use of ads and only get on there to chat with a couple of friends. Even then, I go to a messenger client.

    The one thing I DID like is when games were…you know…free, and didn’t require you to ‘buy coins to get the bestest of stuffs!’ /facepalm

  8. Dave B. says:

    I use FB very little, just to keep in contact with family easilly, use it even less on my rooted Android phone with an ad blocker installed… ads, what ads?

    • longfeltwant says:

      Thank you for this. Whenever I hear about people annoyed by ads on the internet I think, “there are ads on the internet? Well, there was that one I saw a month or two back, but it went away with Right Click -> AdBlock -> Block Image”.

      It baffles my mind when I find a browser without it, and I always install it when I have the opportunity.

  9. IndyJaws says:

    Ads won’t be the thing that drive me away from Mobile Facebook, it’s the actual app itself on iOS. Horribly slow and buggy. I read that they’re rewriting it, due to these problems, and moving away from the current HTML5 code. Hopefully that will have a significant impact and I can move on to hating it for too many ads!

  10. 180CS says:

    Fun fact: I uninstalled facebook mobile, because it’s fucking annoying.

    If you can’t text/call me, it can wait, and I’m probably not interested anyway.

  11. nopirates says:

    the iphone mobile app is already a slow, buggy hunk of crap, so why not kill it with ads, too?

  12. daemonaquila says:

    Which just means that many of us will access FB only through a browser, and we’ll be using AdBlock and SocialFixer. Life is so nice without ads. Ever.

  13. triana says:

    I knew there were benefits to still having a dumbphone!

  14. haymoose says:

    I have signed up to support the App.net movement for an annual $50 fee for not seeing any ads on this network. It’s user supported instead of ad supported and looks very promising indeed!

    Just search “join App . net”

    I’m haymoose & I approved this post :)