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Daily Dose of iQ: Facebook's New App Center Underscores the Company's Mobile Revenue Challenges

Facebook's App Center

Yesterday afternoon, Facebook announced its new mobile app store, called "App Center." 

If you look at the mock-up in the above image, it appears users can buy mobile apps from Facebook's desktop format. "The App Center is designed to grow mobile apps that use Facebook –- whether they’re on iOS, Android or the mobile web," wrote Aaron Brady on Facebook's Developer Blog.

"From the mobile App Center, users can browse apps that are compatible with their device, and if a mobile app requires installation, they will be sent to download the app from the App Store or Google Play."

Facebook is selling mobile apps on its desktop format. Is that weird?

It may seem weird to imagine users buying mobile apps on a desktop computer, but we're moving toward a world where the retail experience spans across channels and platforms (Hello? Omnichannel.)

Just like a customer may use multiple channels when it comes to shopping for a tangible product, it makes sense to provide the same for intangible items like mobile apps. It's important to remember that even though a mobile device is built to allow us to quickly consume information, there are times when it's just easier to compare products on a large screen.

Actually, Facebook is merely copying Google's app market. Google Play currently has the same setup, where you can purchase apps on your desktop and have them automatically sent to your device. Hopefully, Facebook will be able to implement this feature.

The BBC reported today that, ahead of its IPO, Facebook has admitted its mobile monetization strategy is a bit shaky.

Facebook ads are in need of some radical changes to survive the transition from desktop to mobile.

The major problem is simply screen real estate. With a large monitor, users are a lot more tolerant of ads placed in the sidebar. When screen size goes down, however, ads now start to get in the way of the content.

Facebook may have to get the users to opt-in on an ad-free premium app to offset the decrease in ad revenue (a tough sell, which will certainly be met with fierce opposition).

Alternatively, ads may have to be transform to become a part of the content. We've seen product placement happening on movies and TV shows with mixed success. Mobile may just become another channel for these types of ads.

Mathew Ingram of Gigaom wrote that Facebook's mobile ad dilemma is “part of a broader issue."

Ultimately, the concept of pushing advertisements in front of people to sell products is dying.

It lacks the direct connection to the viewer that make it a cost-effective way of generating sales.

Ads are not helpful (See Forbes' To Increase Revenue Stop Selling) and people are becoming increasingly intolerant of watching ads.

Product placement is a step in the right direction, but the whole ad mobile model needs to be revamped. Something like a personal assistant model where your device knows who you are and offers you product suggestions in a timely manner may be a better approach.

Think:

  • You have a reminder for Saturday May 12, 2012: Mom's birthday
  • There's a sale at Nancy's Florist: A dozen roses for $9.99. Would you like to buy some for her?

Ads like these are so intuitive, they don't even feel like ads. And they definitely don't feel as intrusive as the average pop-up mobile ad that you choose to "skip" every time. Perhaps this is the future of mobile ads. Either way, Facebook needs to figure it out.

Date: 
May/10, 2012