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Facebook’s Share Price Dip Blamed On Lack of Mobile Advertising Strategy

The big question on people’s minds is does Facebook have a mobile advertising strategy to monetize on the growing number of subscribers who access the social network site from a mobile device?

Facebook's share price took a drumming as investors doubt that Facebook has an effective mobile advertising strategy

Coherent & Effective Mobile Advertising Strategy?

Now that Facebook has gone public with an opening share price last Thursday of $38 dollars, the pressure is now on for the company to justify its sky high valuation. Some argue that Facebook’s share price dip on Friday from $42 dollars back down to £38 US dollars the following day and then falling further this week to as low as $30 US Dollars, due principally it is claimed to concerns and lack of confidence in Facebook’s ability to understand how to monetize on its mobile traffic. Facebook is now being sued in a class action for £1.8billion according to the Daily Mail for allegedly deceiving shareholders and overvaluing the stock.

Facebook Failed To Disclose Difficulties In Coming Up With An Effective Mobile Advertising Strategy

Facebook founder Mark Zuckerberg is being sued in a class action for £1.8billion for allegedly deceiving shareholders over its disappointing stock market flotation.

The creator of the social networking website has been accused of warning big investors of worsening revenue forecasts but not informing the wider public.

This allowed certain investors to sell their Facebook shares before the price fell – while others saw their stock lose a third of its value.

The lawsuit was filed in New York against Mr Zuckerberg and senior Facebook executives by US law firm Robbins Geller, which in 2008 won a £4.5billion settlement for the shareholders of Enron.

It also names his Silicon Valley investors Peter Thiel and Marc Andreessen as defendants, as well as Goldman Sachs, JP Morgan and Barclays Capital.

It alleges that the accused ‘selectively disclosed’ concerns that the company was struggling to raise revenue from users who access the social networking site via their phones because it is more difficult to carry advertising on the devices than on a PC.

But these concerns did not appear in the shareholder prospectus or paperwork filed with the Nasdaq stock exchange, making them both ‘untrue statements’, according to the lawsuit.

There is growing concern that the share price may fall into single digit territory which would mean significant further losses for many non institutional investors. Unless Facebook can regain shareholder confidence and start monetizing mobile traffic through an effective mobile advertising strategy, expect the Facebook share price to fluctuate significantly.

The crux of the problem is companies are try to use the same marketing and advertising strategies that work with the traditional web and apply that to mobile traffic, which simply won’t work.

There are all sorts of variables that clearly differentiate mobile traffic from standard web traffic which means that companies that want to tap into the growth of mobile traffic need to come up with a bespoke mobile advertising strategy taking into account that a mobile user on a phone browser has a very small screen and is on the move. The mindset and intention of this mobile web browser is completely different to a person browsing the web on a laptop or desktop computer. Therefore, an entirely fresh and different approach needs to be considered for mobile traffic if it is to be successful.

If your company is looking for an powerful and bespoke mobile advertising strategy that taps into the growing number of mobile searches, give us a call today and speak with one of our mobile marketing strategists who will be more than happy to help.

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