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In-App Ads Face Increasing Critical Scrutiny

Largely Ignored

Evidence gathers that in-app advertising is proving to be less than a useful use of mobile ad dollars, as those with lots of inventory find that it might be harder to get rid of than first thought.

Facebook surprised the industry six days ago by indicating it was shelving its mobile ad network experiment. This is unexpected partly because senior executives at Facebook have been telling anyone who will listen that mobile is their top priority. Facebook hasn't said much about why it will be shuttering the experiment, but Pam Parker over at MarketingLand was able to get a confirmation, accompanied by a cryptic statement:

"We are pausing our mobile ads test off of Facebook. While the results we have seen and the feedback from partners has been positive, our focus is on scaling ads in mobile news feed before ads off of Facebook," said the statement. "We have learned a lot from this test that will be useful in the future."

So the official reason is one of prioritization of handling its own internal inventory before developing resources to sell the mobile media of other firms. As it's come to light that Facebook already produces about 7 billion ad impressions a day through its exchange, seeking out additional inventory obviously isn't a high priority.

What's missing in the equation is the denominator. The pricing achieved by the experiment is a closely held secret. That Facebook is shutting down the experiment doesn't necessarily hint strongly that the prices fetched were good or bad, as high prices may have implied profits for Facebook, but low prices may have also undercut Facebook's in-house inventory in an undesirable fashion. Buyers who participated in the experiment are invited to confidentially email their own price observations to editorial@ this domain address.

One persistent problem with mobile advertising has been uncertainty about how much less valuable a mobile ad impression is than a "normal" one. This is further blurred by the fact that many normal impressions are now happening on mobile devices, causing an existential befuddlement about what exactly counts as mobile.

AllThingsD, which reportedly broke the story on Facebook nixing the mobile experiment said that its source said that there were concerns that "Facebook isn't ready to deliver ads on external sites that produce significant value."


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