• by Mark Walsh  @markfwal, November 22, 2013

The rapid rise of Facebook’s mobile ad business is well documented, going from almost nothing before its IPO last year to nearly half of its $1.8 billion in total ad revenue in the third quarter. 

If mobile has been the engine driving the company’s growth, marketers have benefited by gaining access to its 874 million mobile users on handheld devices and seeing higher interaction rates in mobile than on the desktop and lower costs on a cost-per-click (CPC) basis.

But advertisers and agencies want more than just cheap clicks and a place in the mobile news feed. In interviews, several agency execs indicate they want more targeting options, richer ad features, and better forecasting and analytics tools when it comes to mobile advertising on Facebook.

When it comes to targeting, Facebook already offers a wide range of ways to reach specific audiences in mobile. In addition to demographic criteria like age and gender, that includes by location and mobile device type, operating system, and WiFi. It has also extended targeting methods to mobile add interest-based and newer options, such as partner categories and custom audiences.

“What makes Facebook stand out from competitors in the mobile ad space is their targeting capabilities,” said Rob Jewell, president of Spruce Media, a Facebook strategic Preferred Marketing Developer (PMD). Still, agency executives believe Facebook can do better.

One gripe is that the company doesn’t offer targeting specifically tailored to the in-the-moment nature of mobile. “There really isn’t much differentiation between their mobile offering and their desktop offering,” said Craig Elimeliah, vice president, creative technology at RAPP. He suggests Facebook should focus on helping marketers target mobile users more precisely, based on where they are and what they’re doing.

If a user’s latest posts or location indicate they are out with friends, for example, Facebook shouldn’t show that person a serious-themed ad because it isn’t as likely to resonate in that context.

Because Facebook wasn’t started as a mobile service, Elimeliah suggests the company is still figuring out how to adapt both its feed algorithm and advertising to the mobile environment, where context is king. Its acquisition of photo-sharing app Instagram, which just introduced advertising last month, could help speed that transition.

“Instagram gives them the strands of DNA to be natively mobile,” said Elimeliah, which, combined with Facebook’s trove of user data, could help them deliver more highly tailored mobile ads. Instagram is rolling out its image-based ads slowly so as not irk use accustomed to an ad-free experience.

Megan McCurry, vice president group media director, DigitasLBi Chicago, points to Twitter as another mobile-centric company that Facebook could learn from. She observed that expanded mobile targeting the microblogging service just rolled out last week is more advanced than what Facebook offers. “Specifically, OEM targeting has a more robust device model list in the buying interface,” she noted.

Twitter’s updated targeting also enables marketers not just to direct ads according to mobile operating system but by different versions of a given OS.

Jeff Zannella, VP, associate media director, Hill Holliday, also highlights Twitter’s more aggressive push to capitalize on two-screen viewing at home. With initiatives like TV ad targeting, Amplify, and now, TV conversation targeting, Twitter has taken the lead in developing advertising on devices attuned to TV viewing.

“We know this is in the works, but Facebook needs to have an answer to this, as more advertisers are looking towards social TV opportunities in order to maximize the effectiveness of TV advertising,” he said.

The creative content of ads in mobile is also an area where media buyers see room for improvement.

Sabine Cummins, vice president, media, at iCrossing, said the extension of Page Post Link Ads to mobile -- along with rich media solutions from Facebook partners like Celtra and PointRoll, polls, sweepstakes, and video games -- have helped to broaden creative options in mobile. “They’re a long way off from fully unlocking mobile for full-spectrum marketing.”

The long-rumored launch of video advertising on Facebook has Madison Avenue intrigued. Joe Cianciotto, director of digital integration at DDB Worldwide, noted that 75% of all video views in a recent Facebook campaign were in mobile. “That really surprised us a lot,” he said.

Specifically, he was referring to thumbnail videos that can play in Page Post ads in users’ feeds. The video ads Facebook is expected to launch next year would be much larger and autoplay, but Cianciotto believes response to video in Page Post units shows the promise for a full video ad offering in mobile.

Getting the balance right between desktop and mobile advertising on Facebook is also something that agencies would like more help with. DigitasLBI’s McCurry, for instance, said campaigns can run both display and mobile campaigns through Facebook sPMDs, but can’t accurately forecast spend or inventory for mobile with standard industry tools.

That’s made it more difficult to monitor and optimize bid values for ads when running campaigns with different goals by channel. “Instead, our teams break out the social campaigns for desktop versus mobile, and set the budgets accordingly to actually monitor and optimize bid values by placement,” she said.

That said, McCurry and other ad execs indicate they have generally been pleased with mobile marketing and ad results on Facebook so far, especially compared to the desktop when it comes to engagement levels. Zannella, for example, noted that developer clients have had success driving downloads using Facebook’s app install ads.

And Cummins said that overall, Facebook has optimized its ad offerings for mobile better than most other publishing partners. But given its resources, the size of its audience, and wealth of data, the expectations remain high for what Facebook can deliver as a self-described mobile company.