Facebook ‘Flipped the Switch’ to Bundle Mobile Ad Sales

By Elisa Rivero

A recent MediaPost article by Catharine P. Taylor, “Facebook Jumps Over the Candlestick,” emphasizes how bundling enabled the growth of mobile advertising for the social network.

During a fourth-quarter earnings call last week, Facebook reported that total ad sales skyrocketed 41 percent from one year ago. In addition, the social network saw revenue from mobile make up 23 percent of total ad sales, and there were more mobile daily average users than Web users for the first time in the company’s history.

“Trust me. Most companies confronted with a massive, rapid shift in how consumers are using their products couldn’t pull that off, especially not so quickly,” the article reads.

Taylor pointed to a report by Pivotal Research that reveals Facebook “flipped the switch” predominantly by bundling mobile and desktop ad sales.

“Facebook and Google are uniquely able to blur the lines of marketers’ budget-setting efforts which normally consider mobile and non-mobile to be distinct aspects of a digital budget by creating effective bundles of advertising inventory which cuts across devices … We note that such bundling (some would call it “silo-busting”) is beginning to occur for other digital media,” the report reads.

The report also says that in the past obstacles prevented Facebook from implementing a PC-mobile continuum. However, “if indeed much of the growth we saw in mobile advertising at Facebook was effectively because of bundled spending, our new view is that the PC-mobile continuum may have already emerged because of Facebook’s actions last quarter.”

In response, Pivotal changed Facebook’s rating last week from “hold” to “buy” and boosted its price target from $30 to $36.

Bundle has been a big thesis for us. Selling mobile in a siloed channel does not give the full value and velocity of having mobile as part of your overall publishing strategy. We believe that by “bundling” the sales process publishers will sell media across all screens in the most efficient manner.