Facebook trials mobile ad system on third-party sites

Facebook's founder recently spoke about the need to find new ways of showing ads on mobile devices

Facebook is testing a system that allows it to make money by placing adverts for other companies on third-party apps and mobile web pages.

The placements, on Apple iOS and Android-powered devices, are based on data held by the social network about users and the links they have "liked".

The company said it was "a small test" limited to the US.

The firm's stock has risen 23% over the past fortnight, but only after tumbling 54% from its flotation price.

Chief executive Mark Zuckerberg recently said mobile devices were a priority for the firm, but added showing adverts in a separate column alongside a user's news feed on handsets was not an option.

"We've had right-hand-column ads and it's been great, a multi-billion-dollar business," he said at a conference organised by Techcrunch in San Francisco.

"But on mobile, we can't do that. It's clearly going to have to be different."

Anonymised data

By clicking on banner ads or full-screen marketing material, the user is directed to either the advertiser's mobile website or an app store where a developer's product can be downloaded.

The network anonymises information about the users involved in the trial - this means neither the ad exchanges nor the sites where the material appears should be able to trace the clicks back to a specific Facebook account.

Facebook identified a lack of mobile ads as one of its weak points ahead of its share sale

"We've been showing ads off of Facebook on Zynga.com for a few months now and we think that showing mobile ads outside of Facebook is another great way for people to see relevant ads and discover new apps," Facebook said in a statement.

Ads on the go

Ahead of its share sale Facebook identified the fact users were increasingly accessing the net on mobile devices as a risk factor.

"Growth in use of Facebook through our mobile products, where we do not currently display ads, as a substitute for use on personal computers may negatively affect our revenue and financial results," it said in February.

Since then the firm has allowed app developers to advertise their products within its member's mobile news feeds.

It has also introduced Sponsored Stories - posts created by an advertiser that appear if a "friend" or page the user is connected to shares the material.

One industry watcher said the latest effort would enable Facebook to further boost revenues without flooding its own app with more adverts at this time.

"Facebook's greatest asset is its wealth of user data - it's a mine of information that is growing at a rapid rate," said Mark Mulligan, editor of the Media Industry Blog.

"What it's now doing is not that different to what Google does - placing adverts on multiple platforms based on data about its users that it can draw on.

"[There are risks,] all this is happening against a backdrop in which consumers are becoming more aware of user privacy issues, but on the other hand they value the fact the social network and other services that are provided without charge."