How, exactly, do you make social media less… well, social? Facebook may have to deal with that question if users continue to spend more time on the site via smartphone than they do via computer, a situation that the company has admitted may impact its profits if left unaddressed.
A new report from comScore reveals that the average time spent on Facebook via smartphone in the US was 441 minutes in March, almost an hour more than via computer for the same period (391 minutes). On the face of it, this doesn’t really seem like a problem: Users are still spending upwards of 6 hours on the site on either device, after all, and as comScore’s new report reveals, the site is far and away the most successful social media service for mobile device users with an 80.4 percent reach into total US smartphone subscribers over the age of 18, against Twitter’s 26.4 percent. What could be wrong with that?
Well, this: The increasing dominance of mobile devices means that Facebook’s long-standing practice of offering an ad-free mobile experience could end up threatening the company’s bottom line, especially with computer usage down from 442.8 minutes in December (Although that figure itself may be dubious, according to comScore, thanks to a problem in tracking Facebook usage as opposed to tracking usage of sites that had Facebook plug-ins). Facebook itself raised the issue in filing documents for its much-hyped IPO, explaining that “[if] users increasingly access mobile products as a substitute for access through personal computers and if we are unable to successfully implement monetization strategies for our mobile users, our financial performance and ability to grow revenue would be negatively affected.” With the first of those two “if”s now apparently being the case, what luck will the company have with the second?
In March, the company began to insert “Sponsored Stories” into mobile news feeds, the first ads to appear on the mobile version of the site. It’s a smart move, not least of all because data released today suggests that even as Facebook revenue fell last quarter, “Sponsored Stories” and similar social ads are on the upswing not only in terms of ad buys but also click-throughs by user, rising 78 percent from a year ago, driving the cost-per-click for advertisers up an impressive 86 percent. Whether this will end up being enough to successfully monetize Facebook’s mobile presence remains to be seen, but don’t be too surprised if other ads start clogging up your smartphone screen before too long.
Of course, this is just one of many problems for Facebook to deal with. Once the company has reached a point where it feels comfortable enough with its mobile monetization, then it can start to worry about the fact that news organizations are upset about losing traffic as the result of a tweak in how “trending articles” are displayed on the site. With this many concerns, no wonder Facebook is aiming to turn such a high profit from this month’s IPO.