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Why Facebook's Audience Network Looks Like a Billion-Dollar Advertising Machine

And how publishers seem to be benefitting

FAN appears to be growing quickly. Facebook

Facebook is pulling back the curtain just enough to tout how much money it's making for publishers.

The Menlo Park, Calif.-based company today said its mobile-focused Facebook Audience Network (FAN) had a $1 billion annual run rate during the fourth quarter for advertising spend, with "the bulk" of that money going to publishers. 

Run rates extrapolate current results over a period of time to predict financial returns. In other words, FAN—which allows advertisers to buy data-targeted ads across various apps—apparently saw at least $250 million run through its system in the fourth quarter of 2015. If Q4 is any indication, the network is growing into a billion-dollar advertising machine while running promos on third-party apps for publishers such as Daily Mail and The Huffington Post. 

At the same time, it's tough to tell exactly how rapidly FAN, which became widely available to marketers in late 2014, is growing since the company wouldn't disclose the run rate for any other quarters last year. However, it said the number of apps joining the mobile ad network increased tenfold year over year. Apps running on FAN now account for 6 percent of all time spent in mobile apps, according to Facebook.

"Over the past two years, a growing number of mobile app publishers have found success—better returns and more relevant advertising—through Facebook's Audience Network and the people-based marketing approach that powers it," Alvin Bowles, Facebook's head of global publisher sales and operations, wrote in a blog post published today.

At the same time, Facebook today revealed that it would be closing the ad server business it runs through LiveRail in order to focus more on LiveRail's private marketplaces and mediation services. To do this, Facebook in the next few months will begin moving current customers of LiveRail's ad server to Facebook's other ad services.

"As we build out LiveRail's programmatic private marketplaces and mediation services, we will continue to focus on native and video," Bowles wrote. "We believe native and video are key ad formats and that programmatic platforms are the best way through which to deliver them."

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