Remember when Facebook needed a mobile strategy? Those days are over. Facebook’s mobile advertising revenue now represents 76% of its total ad revenue, or $2.9 billion.
The social network wants to combine commerce and advertising to potentially boost those numbers even further. Nearly half of Facebook users are looking for clothes, electronics, and other items to buy in their News Feed and across the network, the company says.
On Monday, Facebook (FB) introduced new ad formats that allow people to browse and potentially buy products when they are using the social network on a mobile phone.
When users click on products from ads in their News Feed—the stream of updates and other content that makes up Facebook’s core experience— they are often taken to a mobile website outside of Facebook’s network that is slow to load. The new ad format allows those users to click through to a Facebook page where they can browse a retailer’s products. Only after a user wants to purchase an item does he or she have to click through to the retailer’s own website. The idea: Give a user less opportunity to leave, frustrated by a slow-loading site.
Facebook will also create a central hub on its network for users to shop for products. Under the “Favorites” section, where users can access the News Feed or Events sections, they will see a new section: “Shopping.” In July, Facebook allowed small businesses to sell items on their Facebook pages. Now businesses can choose to have their items also placed in this shopping tab. Facebook says additional products will be listed there, including any items listed for sale in a Facebook group that a user has joined.
These two new ad formats aren’t the first commerce-minded ads that Facebook has tested. Last year, Facebook introduced its carousel ad format, which lets advertisers use multiple product images and links in a single ad. The Facebook ad format getting the most attention lately is its “buy” button, which advertisers can use in ads that appear in a user’s News Feed.
Facebook cautions that all of these ad formats, including the ones announced today, are trials. The social network says it’s still figuring out which commerce elements work best for its 1.23 billion active users. Indeed, it’s not the first time that Facebook has experimented with letting its users buy items; in 2009, Facebook allowed businesses to sell goods, but the effort didn’t take off.
Its rivals are also trying. Twitter (TWTR) and Tumblr (YHOO) and Pinterest have all entertained or developed commerce-facilitating features like buy buttons. So far, it’s a tough business: While people are spending more time on their mobile devices than ever before, conversion rates on them have not reached levels seen on desktop computers.
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