Facebook tests mobile ad network

Facebook is exploring new ways to target advertising using its 950m users' data beyond its own website and apps, starting with the test of a new mobile ad network.

The social media company, which is under pressure to find new sources of revenue from mobile devices, said on Tuesday that it was testing a "very small number" of ads on third-party apps and mobile websites on Apple's iPhone and Google Android smartphones.

The advertisements, which will appear as industry-standard banners or full-screen "interstitials", will be personalised to Facebook users' demographic profiles and stated "Likes", just as they are on Facebook.com.

Users must be signed into Facebook on their smartphone to see the personalised ads, but they will not need to log into Facebook with each participating app or site to see the personalised banners.

Most early advertisers will be app developers and brands that wish to encourage more downloads from Google and Apple's app stores, Facebook said.

The pilot marks the first time that Facebook's vast trove of user data will be used to tailor advertising across a wide array of other sites. Earlier this year, Zynga, the social gaming company, said its new homepage would use Facebook's advertising system but the deal was a one-off.

Nonetheless, many analysts expect that Facebook will launch a wider advertising network, on the web as well as mobile devices, within the next year.

"We are working on a small test in which we'll be showing mobile ads in apps off of Facebook," said Annie Ta, a Facebook spokeswoman, without specifying partners, advertisers or pricing. "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."

The test may be small, but mobile is seen as Facebook's biggest challenge, as the time users spend with the site shifts from PCs to smartphones faster than its advertising business can keep up.

Facebook's shares have risen by more than 15 per cent since founder and chief executive Mark Zuckerberg said at conference in San Francisco last week that he was integrating mobile into every aspect of his business . "We are a mobile company now," he said, adding that smartphones could ultimately become a bigger advertising platform than the web and rival TV.

Facebook's pilot of a mobile ad network comes in the same week that Apple launched its new iPhone 5 and iOS6 software, which includes deep Facebook integration. Earlier this month, Facebook relaunched its iPhone app.

Brian Wieser of Pivotal Research said that the iPhone 5's longer screen may make banner advertising less intrusive.

Facebook's latest trial of a new mobile advertising technology "is one way to address the concern that many investors have", he said, "even if the absolute amount of money it makes from mobile advertising is not that big".

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