Facebook is to start serving ads to third-party mobile apps via a new advertising network.
It announced the move at the start of its F8 developers conference, which is being held in San Francisco.
The decision to launch the Audience Network has the potential to disrupt the ad sector thanks to the depth of knowledge the firm has about its users.
But one company watcher said the social network would need to be wary of privacy concerns.
“Facebook will have to make sure from the outset that it sets some stringent guidelines as to exactly the type of data that it shares with advertisers,” Lara O’Reilly, senior reporter at MarketingWeek magazine, told the BBC.
“This is moving away from the Facebook platform, where people feel a little bit more comfortable with targeted advertising, onto mobile app screens, which people can feel are very personal.”
The platform could become a huge money spinner. An industry study suggested more than £1bn was spent on mobile ads in the UK alone in 2013, a rise of 93% on the previous year.
Facebook suggested it would deliver better click-through rates than its rivals because it had a better chance of delivering “relevant and interesting” material to the public.
“The mobile ecosystem needs a way to deliver these kind of native, personalised ads to people, and I’m glad that we can deliver more than one million active advertisers to your apps,” said Facebook’s chief executive Mark Zuckerberg at the conference.
Facebook and Twitter
The social network is entering a competitive space. In addition to Google’s AdMob and Apple’s iAds platforms, several smaller firms are also competing to provide the adverts shown on mobile phones and tablets.
Millennial Media, Flurry and Nexage are all promoting their own versions of “programmatic buying” – a way for firms to target their ads at a specific type of consumer via a chosen type of app at an appropriate time and geographic location.
Twitter – another social network – has already moved into the area following its acquisition of the MoPub mobile advertising network last year.
It recently started letting clients buy ads on both the Twitter feed and MoPub using the same software, as it starts to integrate the products.
MoPub acts as a mediation service, allowing marketers to manage the placement of ads across several networks, including Facebook’s. As a result the two are not direct competitors.
“Excited to see Facebook’s FAN. Fits naturally w/in @MoPub’s ad network mediation platform and will help make MoPub pubs more $$,” tweeted Twitter’s vice president of revenue, Kevin Weil.
However, Ms O’Neill suggested that the two social networks’ mobile ad divisions might not co-exist harmoniously for long.
“Twitter’s MoPub argue that advertisers already use its platform to buy inventory across multiple ad networks – such as Apple’s iAd and Google’s AdMob – and the Facebook Audience Network will be added to that set too.” she said.
“However, if Facebook later pursues exclusive publisher relationships, that could mean the two will compete as Facebook looks to take an even larger land grab of the mobile advertising market away from rivals.”
Other announcements made at F8 included news that Facebook is changing the way data is shared with other developers.
In the past the network’s members had been able to authorise third-party apps to obtain information about their Facebook friends.
That is now changing so that each user instead has to give permission to an app before it can see any data about them.
In addition, the firm is also introducing a new function called Anonymous Login.
This will allow users to access a third-party service via their Facebook ID, but do so without releasing any details about them.
The aim is to allow people to try out apps that rely on them having a Facebook login without the user having to reveal who they are until they feel that they can trust the new software.
Mr Zuckerberg described it as a way to test “apps without fear”.
Facebook also revealed it would be making a tool available to developers to add its “like” button to their apps, allowing users to highlight and share content they had seen via the social network.
This should both drive more traffic to the third-party apps and provide Facebook with more data to target its ads.