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Facebook Considers Mobile Ads That Know What You’re Doing

The social network needs to make mobile apps pay. Ads that use phone sensors to understand a person’s surroundings could be the answer.
July 10, 2012

Ads on Facebook may already know a lot about you, but those shown in the company’s smartphone apps may someday make use of much more information, including a device’s location and even data picked up by its audio sensors. Ads based on an understanding of what’s happening around a person could become more like intelligent prompts than promotions, says Andrew Bosworth, the Facebook engineer who is helping lead a group charged with finding ways to make money from mobile users.

Bosworth is a senior figure at the company: he helped create its news feed and was once Mark Zuckerberg’s AI instructor at Harvard. His Mobile Monetization Group is primarily focused on making Facebook’s existing mobile ads more effective, but Bosworth says it will also explore novel strategies such as ads that tap a phone’s sensors to learn what is going on around a user.

“Maybe you’re walking past somewhere we know you’ll like and it tells you there’s a deal you can get,” says Bosworth. “Ads don’t have to be a distraction.” To illustrate the potential of using smartphones’ sensors, he suggests it would be plausible for a phone’s microphone to identify nearby sounds. If it recognized music playing or even a person humming a tune, for example, it could suggest relevant online content or media purchases, he says.

Bosworth’s group is critical to Facebook because the company makes very little money from the mobile versions of its service. Facebook warned before its IPO in May that the use of these mobile services, which is growing fast, “may negatively affect our revenue and financial results.”

Around half of all active users access Facebook through mobile devices, but the company only began serving ads to them in March. The main strategy for getting money out of mobile usage is through something known as the “sponsored story,” a message that promotes a company or brand a friend has interacted with on Facebook. Bosworth told Technology Review that these ads are successful and have a rosy future, but that his group is open to new strategies such as context-mining promotions. In particular, ads that are based on a person’s whereabouts could help Facebook capture much more of the market for local advertising.

The idea of ads so relevant as to be considered useful content has been bandied around for years. But Bob Hafner, who leads the mobile computing group at the analyst firm Gartner, says that making use of the data a mobile device can collect could finally come close to delivering on that promise. “It really works if it can identify what we call ‘time of need,’ when you’re trying to make some kind of decision or to find something,” says Hafner. If Facebook’s mobile ads could, for example, recognize when a person is picking a lunch spot, they would have similarities with Google’s lucrative search ads. Those are very valuable because when people search for, say, “auto insurance,” their intent to spend money is clear, and an ad can respond perfectly.

Facebook already has a lot of history on each of its users that could help make this possible. However, Hafner notes that other companies are better placed to control the flow of contextual data accessible to mobile apps and any ads inside them. “The companies with mobile operating systems have a very big opportunity,” he says. In particular, Google could cleverly combine the Android operating system with its search engine, its ad-targeting business, and AI technology.

Felix Portnoy, a researcher at the University of North Carolina who has studied how consumers perceive online ads, says that for context-aware mobile ads to succeed, companies like Facebook would have to be open about how data is collected and used. Web users generally ignore online ads or treat them with suspicion when they become aware of them, he says. They don’t think of targeted ads and online tracking as a fair trade for free online services. Portnoy believes well-targeted contextual ads like those Bosworth envisions could change that perception if used carefully. However, smartphone users may already be primed to dismiss any and all ads. “We may become habituated to mobile ads as they become more ubiquitous, as with banner ads on the web,” Portnoy says.

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