Facebook has acquired ProtoGeo, developer of the life tracking application Moves. ProtoGeo will integrate in Facebook, but the existing Moves application will remain a standalone service.
- Moves tracks user activity including walking, cycling or running and includes a pedometer.
- Unlike other tracking applications, Moves also recognizes places automatically based on a geofence around the current position of the device.
- The collected information is displayed as a timeline to the user and can be connected to other applications for other life tracking functions and capabilities.
Facebook’s drive to be a “mobile first” company receives new momentum with the acquisition of ProtoGeo. As Facebook continues to expand the revenue it generates from its mobile users, targeting these users accurately is paramount. One of the best ways to increase the value of advertising within its application is for Facebook to increase the level of accuracy of its target audiences – location information is essential to tie users to physical commercial partner locations. Presenting the correct advertising, at the right time and place, based off knowledge derived from the profiles of its users, enables Facebook to generate premium rates for its ads.
For Q1 2014, Facebook reported 609 million Mobile Daily Active Users, an increase of 43 percent year-over-year. Mobile Monthly Active users were 1.01 billion in the most recent quarter, up by 34 percent YoY. For the quarter, Facebook reported $2.27 billion in revenue generated from advertising. Mobile advertising generated 59 percent, or about $1.3 billion, of the overall advertising revenue. In the first quarter 2013, mobile advertising revenue represented 30 percent of the overall advertising revenue generated by the social network.
The company is likely to announce its own advertising network at its f8 developer conference in May. Facebook can already provide advertisers with detailed user profiles based on the activities on the network, but ProtoGeo’s technology will enable Facebook to gain insight into the activity of its users which is not explicitly shared in the application via status update.
The always-on nature of life tracking technology in modern smartphones allows Facebook to connect activity in the service to real-world insights which can provide valuable content to advertisers. Not only can advertisers use this information to target their campaign, the same information can also be used to track campaign performance.
The goal of the acquisition for Facebook is not to become a health application, but rather the goal is to build a more robust mobile advertising platform, with hundreds of millions of potential targets, which can target advertising based on expressed interest backed by location confirmation to back up the assumptions derived from the shared content in a profile.
When Facebook launches, it will bring it into further competition with Google’s developing mobile advertising strategy. Furthermore, by integrating location capabilities like those provided by ProtoGeo, Facebook is turn itself into a direct competitor to carriers and other players in the location based advertising space, which rely largely on network based information to target potential customers geographically.
Carriers like AT&T and Verizon are increasingly looking to generate revenues from their existing user base with services built on top of its existing network infrastructure. If Facebook is successful in launching an integrated advertising and localization product, carriers will have to compete with the social network for advertiser attention, as the latter is able to provide to a larger number of potential customers worldwide where most carriers are generally limited in their geographical reach.
Lastly, the Moves application automatically associates the location of the handset with nearby businesses and other location listings. Integrating this capability in the wider Facebook ecosystem considerably raises the value of Facebook Places as a local business’ public listing where users go to find relevant information like opening hours, menus or other details.
Raising the stature of this part of its product allows Facebook to act as Points of Interest (POI) provider and therefor competes with traditional mapping companies like HERE, TomTom or Google and its Maps database, as well as with startups like Foursquare and Yelp. Where traditional business listings services need to generate a fresh database with its own workforce, Facebook is able to turn over the content generation to the businesses themselves because Facebook provides a direct link between users and a business, beyond the ability to rate a location or leave a comment for others.
While Facebook’s user numbers indicate that it is already a “mobile first” company, the acquisition of ProtoGeo plays an essential part in establishing a highly capable mobile monetization business infrastructure based on mobile advertising and location based services. If successful, Facebook would present significant competition to other advertising networks, wireless carriers and map content providers – all on the back of a network of over one billion users.