Facebook Testing Mobile Rich Media Ads

There was a fair deal of relief spread around following the announcement of Facebook’s IPO yesterday. First off, investors who had been dying to get their hands on a piece of the social network’s business knew their time haunting the secondary markets was almost over.

But even bigger, so much speculation about and guesstimating Facebook’s ad revenue was put to rest as the S-1 offered some hard numbers. Now we know 83% of Facebook’s $3.7 billion in revenue came from advertising, and that $3.15 billion was up 145% year over year. Also impressive: fourth quarter ad revenue jumped to $943 million vs. $798 million in the third quarter.

However, even the king of display impressions admitted it was missing out on a gigantic revenue stream – 425 million monthly users (about half of its total user base) frolic on the mobile app or website without seeing ads. Give yourself a moment to recover from the shock – that’s a lot of potential ad bucks.

Especially considering that a growing amount of browsers across the globe are connecting to the Internet only via mobile, Facebook acknowledged in the filing that lack of a mobile ad product “may negatively affect our revenue and financial results.” The one proposed solution – adding the much-hyped Sponsored Stories to the mobile news feed – is pretty lackluster.

However, it seems FB does have grander mobile advertising plans. Paul Gelb, Razorfish Mobile Practice Lead and one of the keynotes at OPS Mobile back in December, tells Digiday that the agency is trying out mobile and cross-platform rich-media ads on Facebook. Ad functionality, he says, is similar to offerings from Crisp Media or Medialets.

According to Gelb, it’s taken two years to get to this with Facebook on mobile ads. The social network has always been a little slow on the mobile front – consider that just last year it released long-awaited rehauls of its mobile apps and websites, and just introduced its first iPad app. Facebook and its CEO and cofounder Mark Zuckerberg have long touted their commitment to user experience over revenue, but going public means shareholders are going to demand no revenue stream remain untapped.