At F8, Facebook announces their new Facebook Mobile Ads Network – Chris and David discuss the impact on developers and publishers, users and if this is the next big step in mobile monetization and much more including:
- How we expect this new ad network to affect app monetization
- What anonymous login is and how it impacts users and devs
- Why announcing an ad network and anonymous login at same time is super smart
- Is this good or bad for mobile marketplace in general?
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Resources and Links Mentioned in this Episode
Chris: Hi, guys, and welcome to another episode of the App Business Podcast. As most always, I’m joined by David Pfahler. Hey, David, what’s going on?
David: Hey, Chris. Hi, everybody.
Chris: We’re moving to the three episodes a week format, which allows
us to go a lot deeper and cover a lot more topics, so we hope you enjoy that. Would love to hear your feedback.
We’re also doing our first Google Hangout Friday, although by the time this airs, it will be the second Google Hangout. Still, it will probably be a train wreck, so come watch a train wreck on Friday at 10 a.m. Eastern Standard Time. What’s the Munich time, David? What is it, 4:00 for you?
David: I think 4:00, yeah.
Chris: So 10:00 a.m. Eastern, 4:00 p.m. Munich, and we’re going to just talk about what we discussed or what we published over the previous week and whatever else is of interest. It will probably be 5 or 10 minutes.
So, by doing more episodes we can go deeper, like I said. One of the things we want to talk about, super-hot in the news, just announced, is the Facebook mobile ads network. We’re referencing a Wired article, but there’s tons of content on this. You can just type in Facebook mobile ads network, and you’ll see it. But really huge implications for this, and I’m pretty excited about it. What are your initial thoughts, David?
David: Yeah, so this is all based on the f8 Facebook Developer Conference, which is currently being held in San Francisco. Mark Zuckerberg did a presentation there, which was actually covered, believe it or not, in the local radio news here in Bavaria in Germany, so it actually has a lot implications, apparently.
What Mark said there on stage didn’t get too much applause from the developers, because he was basically announcing that Facebook will work differently, that is, more restrictively, with the user data, and that means that developers will not be able to use it as easy as before, while Facebook itself of course is monopolizing the use of their own data. So I think that’s one point, and what’s more important for App Business podcast is that they are going to launch their own ad network and of course going to compete with Google AdMob.
Chris: Yeah, and Google’s AdMob doesn’t even compete with the current players, really.
But before we dig into the ad network – so, specifically when you’re talking about monopolizing the data and eliminating the sharing of data to some developers, what’s the specific example of that?
David: Right now, we aren’t exactly clear on what they are going to implement. But what they announced is that you could try to use apps anonymously with a feature they call Anonymous Login. So, the way I imagine it to work is that you could basically tell Facebook I want to use this app or that app, and that would then apply also to mobile apps, of course, where they will not immediately give the app your real data. I can only imagine what they’re going to do. Maybe they will use mock data, or there’s going to be a new API that the apps have to implement in order to be functional, and they will just need to be compatible with this technology. So I think the details on that are still a little bit in the dark.
The Anonymous Login, of course, is not so cool for the developers because they will lose a lot of people who just wanted to try their app and will then decide well, okay, this is not for me, or for whatever reason, they abandon the app, and there is no way to connect to these users again. And there’s no way, if you look at it from the more evil side, there’s also no way to make money by using their data.
Chris: Or there’s no way to know what demographics are not interested in your app as well.
Chris: But I don’t really understand. So, I know we’re just speculating here because they haven’t announced the specific mechanics of it. So I log in anonymously, and then I decide, oh, I really like this app and I want to use my actual data and I want to connect with my friends, et cetera. Does that mean I have to log in again, or is there like – do you anticipate some time-based, if you’re in the app for five days or five uses, then it sends your real data, or…
David: The way I understand it is that as a user, you explicitly have to confirm again that you want to use this app with your real data. And of course what this will do is force a lot of apps that actually don’t really need your data to not use it. So the user will think, well – let’s say you have an app that is trying to serve you music based on your taste, right? And they want to use your Open Graph, you know, your Facebook graph, social graph data to customize it for you automatically to your taste. There will not be a way to use this app – the main feature of this app without giving them your data, but you can still use the basics of the app, like the anonymous user listening to music kind of thing.
And I think that’s a good idea from a user’s point of view because a user will try to see if the music is actually good quality or if the user interface is actually usable and these kinds of things, and if they have a problem with the app that basically kills it for them, they will not even consider giving their data to the app. But on the other hand, that might be a problem for apps that only shine if you actually give them your data, and you might not even get the chance to show the user what you can do with that data.
Chris: Right. So then, as this relates to the ad network, here is what I anticipate is the impact, and it makes sense that they announced these at the same time.
So, in a lot of my apps, I have something like Share Your Results, or – nothing to do with inviting your friends or anything, but just post your achievement, post your score, post whatever, right? And in order for them to do that, they have to – not because we want them to, but because in order to post to their wall, they have to log in with Facebook, right?
So we have a Facebook log in and they log in, but then what that allows us to have is all their Open Graph data so we can serve them more relevant ads. Well, now we won’t have that super, amazing Open Graph data to share with ad networks. The only ad networks that will have that is the Face book ad network, which is a pretty smart move.
So, basically, if you aren’t offering significant value from using Facebook, meaning really leveraging their likes and dislikes and their social network, like the Spotify example or the music example, and it’s just lame like my app where it just posts to your wall, well, my apps are going to suffer for that kind of sharing unless either it’s really compelling to share or I’m using that Facebook mobile ads network, because now I have an ad network that can deliver super targeted ads.
Does that make sense?
David: Yeah. That’s an awesome observation. I didn’t even think about
that. That’s a very smart move there because a) if you have the Open Graph data, there is really no technical way to prevent you from using it in your other ad SDKs, and b) it would also probably be illegal if they to try to or if they forbid you to use it with competitors. So that would be anti-competitive. But in this way, they will say I wash my hands clean, you know? There is nothing I can do about it, it’s the user’s choice, and the user chose to not use Facebook or to not give this app the data, but of course we can still serve our own ads using that data.
Chris: Right. Related, my initial reaction would be, okay, well, gosh,
they’re making it really hard on the user. Like, I always try to think, okay, forget what Apple wants, what Google wants, what Facebook wants. What does the user want, what’s best for the user? And I figure the rest will solve itself. The rest will figure itself out.
It seems like maybe there’s some benefits to the user, maybe it makes it a little harder, maybe they lose some of the benefits in some of the apps, et cetera, but it seems like it would be a deterrent for developers to use Facebook login as the social login, you know, as the default login script. But it shows you the power of Facebook, because what else are you going to use? Twitter is not the same kind of social dynamic. It’s not your friends, it’s people that you’re following because you have interest in them, but it doesn’t mean you want to play Candy Crush with them. It kind of shows their strength against Google+. Like, there really isn’t another social network that is so ubiquitous like Facebook. And man, if that’s not showing how powerful they are with saying, hey, you have to use our social login because there’s not a good alternative.
David: It is a very smart move in the way that they first made it such
a good value proposition. They said, “Okay, use our login. Everybody has it. Here’s an SDK.” It’s like one line of code. It was really easy for developers, and also made a lot of business sense because it’s got all of that data. Now they’re going to turn the tables and say, “Okay, you already have this implemented, do you still want to use this, (a), and (b) if you’re going to make a new app, are you really going to use something different?”
And again, we don’t know exactly how they’re going to implement it, so I have trouble believing that they will make just the login part harder. But I think . . . one piece of information that I heard is that they will, for example, not give you the birthday automatically anymore, which is apparently something that you just got by logging in or just by in any way connecting yourself to Facebook. Of course, there are different levels of permissions that your app can get, but connecting to the Social Graph is something that was so valuable, and they just offered it for free, and now they’re basically charging for it through a back door, so to speak.
Chris: Yes. You know, I don’t think it’s a bad move. I mean, I think it’s really smart of them. And, you know, like we were just riffing on, how much it makes sense with their ad network.
But I’ll tell you what, I’ve tried to pass Open Graph data to various ad networks either through MoPub or through RevMob, and it’s not super easy. And maybe – I just, you know, this is something that I visited about six months ago, and maybe it’s gotten easier over the past six months, maybe we’re doing it wrong, but that’s very valuable data, and you can get such targeted ads that are going to make you more money, and it didn’t seem like any of the ad networks really cared that much. It was more like, hey, tell me what app you’re in and then we’ll let, you know, the real-time bidding thing. We’ll let a bunch of programmatic buying occur for your app. That’s a lot of guesswork when you could just go right to the user. I mean, I think the ad network that Facebook is going to offer, I’m really curious to see what the eCPMs are going to be. But I can’t imagine . . .
David: It’s going to be much better than the competitors.
Chris: It’s got to be, right?
David: Yeah. And then they still have their trump, or whatever you want to call it, this card up their sleeve.
Chris: Trump card. Yeah.
David: Yeah. I mean, that’s going to be a lot of pressure on the competition. We are basically praising Facebook for their brilliance here, but it’s going to have an impact on developers, right?
Chris: Yeah, but I think it’s going to have a good impact. But again, my apps aren’t . . .
David: If you’re using Facebook, right? If you’re using their network.
Chris: Yeah, right. Which we are. Which I am, yeah.
David: I mean, I can understand that that makes sense from an eCPM
standpoint, but they will have just another monopoly then in the ad network space. And then what are you going to do if they are going to change the trump service or charge more or something like that, right? So it’s a problem.
I thought about the login when we discussed the login earlier, having, you know, basically only the alternatives of Twitter, etc. I think we’ll make another podcast episode about what possible login methods you could use, because there’s OAuth, and there is all these kinds of services still floating around. Can use G+? Do you want to even do your own account manager, etc.?
So I think it’s an interesting topic as well
Chris: Right. Well, you know who Twitter bought—what, three months
ago—MoPub. And that’s a big ad network mediation service as well as a real-time bidding platform. So it’s all heating up.
I’m just really surprised that Google AdMob is still the solution from Google. I don’t know how they fell so far behind on this, unless I’m missing something, and if I am, please write in and tell us or email us. It just seems that – how is Twitter with MoPub and Facebook Mobile Ads now with their ad network so far ahead of Google yet they have Android? It just seems like, how did Facebook get so far ahead.
But competition is good, moving the bar higher is good. I think these are some of the things when we talk about these reports where we say, oh, ad spend is going to increase drastically, well, these are some of the things that allow for better ROIs. If you can’t provide more targeted ads and get a better return on your dollar spent, then money is going to fly to mobile if this works.
I’m excited as a developer, well, as a publisher, to get this implemented and see what kind of eCPMs and fill rates I get, and on the other side, how I could leverage the ad network on a purchasing side where I could buy ad impressions. So, I think this is really cool. It’s definitely a next step in this whole thing. I think this what we want. We want companies pushing it and making it harder for the other companies so they can up their game, too.
David: So basically what we’re saying is let’s hope that Google and others take this as a pressure to innovate?
Chris: Right. Yeah, absolutely.
David: That would be great. Absolutely.
I think that’s it for this episode. It was a nice discussion, Chris. Pretty interesting, and I think we will absolutely revisit that topic in the future because this is going to turn out interestingly, I’m sure.
Chris: I signed up for the beta today, and it says it takes 5 to 7 days to approve it, so I will definitely be sharing my experience, and I’d love to hear the comments. Email us, tweet us, @AppBusinessTalk is our Twitter.
I think we need a Facebook group, because we’re starting to talk about a lot of cool stuff. I don’t know if people like Facebook groups or not, but I’d love to hear what other developers and publishers are doing with this. I think right now it sounds positive, and I think I’m going to make more money as a result of it, which is always nice.
David: Looking forward to seeing your results, Chris. Absolutely.
Please listen to us and let us know if you would like to see a Facebook group or any other wishes, suggestions, or feedback on appbusinesspodcast.com and leave a comment.
Chris: Thanks, guys. Talk to you soon.