Has Facebook quieted the mobile advertising haters? Marissa Mayer thinks so

By Erin Griffith , written on September 24, 2013

From The News Desk

On stage at the IAB Mixx conference in New York, Charlie Rose asked Yahoo CEO Marissa Mayer if Facebook has proven the haters wrong about mobile ads.

Facebook has spent the entire first year of its existence as a publicly traded company obsessed with mobile. Mobile was the reason Wall Street investors panicked about the stock right before it went public. Concerns around users migrating to mobile, which was more difficult to monetize, have haunted the company ever since.

But Facebook surprised everyone by reporting gangbusters numbers on mobile for the last to quarters. Last quarter, Facebook reported mobile ad income was up 75 percent, sending Facebook's stock by 67 percent in the months since. The company expects mobile income to dwarf its desktop business.

A year ago, I argued that we're still waiting for Internet ad spend to catch up to the Web -- we shouldn't make the same mistake with mobile. In the early days of the Web, CEOs of consumer Internet companies, especially Yahoo, believed it was only a matter of time until the ad spend matched the amount of time and attention people were spending online. All they had to do was wait for the ad dollars to roll in.

That still hasn't happened.

So I argued that mobile marketing would be the same way if publishers and tech companies didn't innovate. Mobile is still, as a category, a mere fraction of advertisers' budgets, but that is quickly changing. Facebook's fast mobile transformation is proof of that. This week IAB unveiled a new study that shows that mobile advertising budgets have risen by 142 percent since 2011.

So what does Mayer, who is betting Yahoo's future on mobile, think? Has Facebook, with newfound strength in mobile ad sales, put to bed stories that mobile would be hard to monetize?

"I think so," Mayer said. She compared the questions over mobile advertising to the questions Google heard over and over in the early days of search. People constantly asked Google how they could possibly make money with a search engine. "The answer was the right formats, the right pricing and quality controls over user experience," she said. Search, with its sweet sweet nectar of intent, is the most effective, and profitable form of online advertising.

"Last Fall it was that same thing, Mayer said. "'Mobile is great, it's convenient, it's where the users are going, but will there ever be real advertising opportunities there? Will there ever be real revenue?'"

The answer, she said, is yes. As with the search ad unit she helped perfect at Google, mobile ads will need to be monetized with the right quality of content, the right personalization, the right method of delivery, the right everything, measured and scrutinized down to the pixel. "Everyones trying to crack that nut and there's definitely earl signs of it working," she said.

Mayer hit on many of the talking points she'd discussed at TechCrunch Disrupt a few weeks back, including Yahoo's role as a "strong partner" to the big four tech giants -- Apple, Google, Facebook and Amazon. "Those four companies have a hard time working together," she said. "We have multi-year, multi-million, sometimes multi-billion-dollar partnerships with Microsoft, Google, Facebook, Apple and Samsung." Yahoo provides the content and some services to the companies, but because of its unique position between media company and tech company, has the ability to partner rather than compete.

She noted that she doesn't read any of the press about her, paraphrasing a quote about the way that press, good or bad, influences you the minute you read it. "I choose not to read it because I know who I am and what I like," she said. "And I have a clear vision of what I want us to be achieving."