After announcing its mobile ad network at f8 in April, Facebook today officially launched 'Audience Network' and started letting any advertiser buy and any third-party app host ads powered by its targeting data. The big new detail is that Audience Network isn't a seperate set of ad inventory from what's available in Facebook's own apps and site with a direct buying interface. Instead, it's 'a simple way to extend Facebook advertising buys across mobile apps to increase relevancy for people, yield for publishers, and results for advertisers', according to Audience Network's product manager Sriram Krishnan. All ads bought on Facebook are eligible to show up on Audience Network unless an advertiser opts out.
Similar to the web-based 'ad network' Atlas that Facebook just relaunched, Audience Network is a way for Facebook to earn money by leveraging its personal data trove for targeting without cluttering its own service with any more ads. Its gives developers an easy option for monetization by hosting Facebook's ads, while letting advertisers get in front of more people in a certain demographic more frequently than if they could only reach people on Facebook.
Until now, each dollar Facebook earned meant annoying its own users with more ads. This created a natural cap on Facebook's revenue unless it wanted to pester us so much that we stopped visiting. Now it can sit back and cash in on all the targeting data it's collected.
It's Good To Be The Middle Man
Audience Network bridges a gap between developers and advertisers, thereby endearing both to Facebook.
More Money For Developers Through Targeting
Developers want to show ads in their apps to make money, but don't want to hire their own sales team or deal with any of the technical overhead. Before, that meant working with independent ad networks who would sell the ad inventory in their apps. But because these ad networks had limited information about the identities of who they were reaching, the ads weren't targeted that well, didn't resonate, and didn't generate enough clicks or qualified leads to command high rates from advertisers.
Facebook Audience Network pipes in Facebook's top-notch ad targeting and its huge supply of 1.5 million active advertisers. Krishnan tells me 'we're seeing great results and demand for/from both advertisers and publishers.' By using Audience Network, music app developer Shazam saw a 37% increase in ad network revenue. Game maker Wooga says Audience Network 'performs 10x better in Asia and Latin America than any other ad network.' And Glu, makers of the wildly popular Kim Kardashian mobile game, says it earned twice as much per ad impression as with other ad networks. Developers like Zynga, Deezer, IGN, Merriam Webster, and Vinted are all using Audience Network now.
Assisting developers with advertising could make them more likely to integrate more of Facebook's developer tools, such a social login, sharing options, or Parse's backend services. These help Facebook gather more data about users, content for its News Feed, and Parse subscription fees. Facebook doesn't own a mobile operating system like iOS or Google, so this is it's way to be what CEO Mark Zuckerberg called 'a cross-platform platform' at f8.
For advertisers, the biggest problem with Facebook was that even though it has 1.32 billion users, they would still run out of people in very specific demographics like 'married women in California age 30 to 40 with children, a college degree, and who like Samsung'. Facebook's ad targeting power let them find some of these people, but advertisers would have to compete for the limited impressions and could only show each person an ad a limited number of times. They wanted more inventory.
Audience Network delivers. It lets advertisers reach anyone with a Facebook account, even when they're not on Facebook. That means they can market to more people in a certain demographic, and get in front of them more times. Walgreens says it boosted the reach of its ads by 5%, while improving its click through rate by 4-5X. HarperCollins got 16% more ad impressions thanks to Audience Network. And reach through Audience Network will surely grow now that it's open to all developers.
If Audience Network is a hit with developers and advertisers, it could be a huge boon to Facebook's revenue while also improving its relationships with its most important partners. If Facebook ads annoy you, at least now it has a way to grow its business without stuffing more of them into your News Feed.
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