Facebook is making it easier for ads to reach the growing ranks of users on smartphones and mobile devices, taking a significant step toward addressing one of investors` most pressing concerns and broadening its appeal to marketers.
The company, which has seen revenue growth slow in past few months, began letting marketers craft ads destined specifically for mobile versions of the No. 1 social network.
It`s also letting advertisers direct ads into users` news feeds. Both represent significant shifts for the company, which has until now restricted marketers` presence on certain parts of its service.
The eight-year-old company started by Mark Zuckerberg in his Harvard dorm-room on May 18 became the first American company to debut at over $100 billion value; but mounting worries about its inability to fully transform a growing mobile presence into ad revenue have helped wipe $32 billion off its value.
Shortly before the IPO, several analysts lowered financial targets on the company after Facebook cautioned about its revenue growth due to the rapid shift by users to mobile devices.
"It is a major drawback to Facebook that they have been unable to monetize the mobile activity of its user base," said Brian Wieser, an analyst with Pivotal Research Group.
The tweaks to its advertising system come at a time investors are questioning the long-term money-making potential of Facebook`s underlying business, and the social networks` effectiveness as a marketing channel.
Previously, ads could buy a broad category of "sponsored stories": ads that would run on the website. But Facebook controlled whether the ads actually appeared on mobile devices, and in users news feeds.
BdST 2247 HRS, JUN 6, 2012
Sabbin Hasan, ICT Editor
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