Facebook may be working on delivering advertisements to its mobile users, addressing one of the biggest concerns from the company's IPO filing.
Marketing agency Razorfish said in a Digiday article posted yesterday that it has been working with Facebook on a test program to deliver mobile ads. The firm had been working with Facebook for the past two years, looking at various opportunities in mobile.
The glaring lack of revenue from Facebook's mobile business was one of the red flags that popped up when it filed an IPO prospectus on Wednesday. Despite an audience of more than 420 million monthly users, the company's mobile users don't generate revenue because Facebook doesn't deliver ads to its mobile Web site or smartphone app. It was enough of an issue to be listed under the risk section of the filing.
It's easy to see why Facebook would tread lightly in this area. With smaller screen real estate on a phone, it would be easy to clutter up the app or site with ads, irking users used to a clean experience.
There were few details provided by Razorfish to Digiday. But the report noted that advertisers could reach all devices with a single buy, so the ads would run across different devices, operating systems, and mobile browsers.
The ads could also be sophisticated, including interactive elements, animation, video, location-based features, and the ability to click a link to make a call or tap to get a coupon.
While Facebook has an impressive audience, it has been much slower to get into mobile ads than Google or Apple, which have made strides in creating ad networks for their apps. It's effective enough that major franchises such as the Angry Birds series can rely solely on ads and be given away for free to customers.
A Facebook representative declined to comment, noting that the company is in its quiet period before the initial public offering.
Razorfish wasn't immediately available for comment.