The amazingly popular photo-sharing was bought by Facebook in May and will be an integral part of Facebook mobile going forward, highlighted by our profile and marketers' guide earlier this week. One can expect that photos and image will become increasingly important to the experience as the former Instagram staff settle in at Facebook and are allowed to make their mark on the app.
You can expect Instagram's trademark image filters to be integrated quite quickly and for Facebook's photo sharing features to become far more immersive in the coming months.
Lightbox is a photo-sharing app that has a few more quirks and is far less heralded than the high-profile Instagram. Though the buy is thought to be more of an acqui-hire for Facebook, we may still see Lightbox-style photoblogs popping up on Facebook mobile, and if not, we can expect some improvements and product innovation with regard to the Android app, given that it is the platform Lightbox specialises in.
With Glancee being brought into the fold, location-mapping features should expect greater prominence on the Facebook mobile app. Glancee is an "ambient location app" and now Facebook owns their technology, there are sure to be improvements and developments made to check-ins and location tagging for mobile users.
Face.com is not only phonetically similar to its new owner, but a leader in mobile facial recognition technology. It could make tagging a thing of the past, or at least make it significantly easier for mobile users as Facebook currently does not offer a quick way to tag friends while posting a mobile photo.
Specialist mobile commerce app Karma will allow Facebook users to send their friends via mobile devices, it also allows said friends to exchange such a gift if they are unsatisfied or just bad friends in general.
With the acquisition, Facebook has shown itself to be serious about social commerce, though brands have shown little of the same fervour. Karma will plug in nicely and will surely help users to commemorate birthday's and occasions with more than a flippant wall post.
Facebook bought Spool, a bookmarking and content-sharing smartphone/tablet app, last month. Spool allows mobile user to organise their online content easily; things such as digital books and videos that users want or need to save for later, can now be bookmarked as part of Facebook, thanks to Spool.
It should help mobile users to remember online curiosities that caught their eye and nudge them to follow up during their leisure time or share them with friends across mobile devices if they want to.
Another startup, Tagtile's technology works offline, in that users need to swipe their phone in stores that have the Tagtile cube to gain rewards and discounts.
Facebook has been unsuccessful in their attempts at creating gift cards with large American brands, such as Target, but Tagtile could benefit Facebook mobile and major brands hugely.
Tagtile will also aid Facebook in compiling masses of consumer details and information, which will be vital when it comes targeted advertising and will prove extremely lucrative to potential partner brands.
Facebook's Mobile Revenue Streams
Among all the acquisitions and app releases, there is one thing that Facebook is trying to achieve with mobile: monetisation. This is mostly because of pressure from new investors and the ever-present fact that a company must continue to grow and generate more funds to keep the investors happy. With roughly 540 million users now using mobile regularly, it's an obvious move.
The main model spearheading this is Sponsored Stories. Appearing in your news feed - since there is nowhere else to place advertising on mobile - the ad is presented in the format of a status update and those of your friends who like the page are referenced in it.
There's been a lot of talk about whether or not they would take off, but at Facebook's second quarter earnings announcement at the end of July, its COO Sheryl Sandberg revealed that these ads are generating $500,000 in revenue per day, that amounts to $183 million if it was to last for an entire year. Considering that these sponsored stories weren't really rolled out until June, it's a step forward and this figure will only increase as the company moves forward.
However, considering the massive numbers that access the site through mobile, this figure should be a lot higher and since the company wants to match mobile revenue with its desktop earnings, this figure will need to increase dramatically over the next 12 months if it's to make mobile a success and keep its investors happy.
The other areas that will tie into mobile revenue are Facebook Offers, which is available on both desktop and mobile, and the App Center, while all the apps available are free, could generate a significant amount of revenue through freemium features such as upgrades and expansion packs.
Facebook's App Center
Only made available worldwide on August 1st, Facebook's App Center was unveiled to U.S. users in early June before making its way to the UK a month later. For mobile, a significant number of these apps are available either in Apple's App Store or on Google Play, but these apps incorporate Facebook connect to help play them.
The part that make Facebook's App Center particularly alluring is the fact that it's not limited to a specific platform. Granted, it's only just started and its purpose is more to provide a hub for users to find new apps, but instead of a traditional search bar, the App Center makes recommendations based on what your friends use. Facebook wants social to be a huge part of its app experience and considering how big the business is, it would have been foolish not to make this move.
Currently, discovery in the center is limited to just what your friends like and the most popular apps. At the moment, there's only a couple of hundred apps available to download from the hub. There's no search function for the center, but chances are that this will change as the number of apps made available grows.
Currently it's free but what the company has been working towards is a freemium model for completing transactions. Recently, it simplified the process so that payment is only a two tap process. This is significant as the freemium model has become popular with app developers and in due course, Facebook would be expected to take a small commission for every purchase made. It's still very early days for Facebook's App Center, but considering how popular apps are ever since, it's only a matter of time before Facebook decide to properly monetise it.
What Does The Future Hold?
The past year has been as challenging for Facebook as it has been filled with opportunity. It even said in its own S1 filing for its IPO that mobile presented the biggest opportunity and the biggest threat at the same time . The issue is that more people are accessing the site via mobile than they are via desktop - where there is lots of room to show ads. The future all comes down to revenue and how Facebook will generate as much from mobile users as it does from desktop users.
The answer won't come in the form of traditional display adverts and it looks like it's well-aware of that, judging by the acquisitions it has made to date. Location aware advertising, local marketing and mobile commerce hold the key. The fact that Facebook powers six of the top ten apps and the recent launch of the App Center on Facebook shows that there will be a massive new revenue stream that involves app distribution. This should be, at least, a billion dollar revenue stream for it annually and continue to grow as mobile adoption continues.
The acquisition of Instagram was a smart move because Facebook not only grabbed 50 million users (80 million as of today) but they also took one of their competitors out at the knees before they got any traction. Instagram was the first truly mobile only social network and the fact that photos was at its core was worrying for Facebook. The future will show that it was a brilliant strategic move and the price will look cheap.
Facebook is clearly betting its entire future on mobile and it's right to do so. The big issue is that the entire platform and most of its success has come from the desktop so it's really trying to shoehorn a lot of stuff into the mobile app. Mobile is also fragmented across multiple platforms and devices making things even harder.
The biggest threat for Facebook is not Google or Twitter or other existing start ups, but an entirely new mobile-only social network. Instagram showed how quickly it could grow and there will be other similar efforts. This is why Facebook has such an aggressive acquisition strategy when it comes to mobile and getting the best talent on board.
The big problem is that nobody, not event he smartest minds at Facebook, has a clue where mobile is headed. Nobody can say where we will be in two years time. The one small thing that Facebook has to its advantage is that 600 million highly engaged mobile users use the site nearly every day. Nobody else can claim that.
Reviews and Opinions
There's no shortage of opinion as to how Facebook's mobile strategy will pan out, but here are a few select examples:
- ReadWriteWeb looks at the factors that would make a successful mobile strategy for the company.
- After its purchase of Face.com in June, CNBC looks at how acquiring startups fits into Facebook's mobile strategy.
- Forbes believes that the highly disruptive mobile strategy Facebook could have is hiding in plain sight.
- When Facebook released its camera app, AllThingsD looks at how the Instagram deal fit into this release.
- ZDNet focuses in on Facebook's App Center and how Facebook is realigning its mobile strategy around it.
- The Wall Street Journal looks at how Facebook underestimated the challenges mobile would bring and has left it playing catch-up.
- Back in May, CNET considered that if Facebook died, its killer would be a purpose-built mobile social network.
- At the same time, GigaOM questioned who would be adapting to whom: Facebook to mobile or mobile to Facebook?
- MarketingWeek explains why mobile has to be the epicentre of Facebook's future.
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