In August, Facebook CEO Mark Zuckerberg said he expects as many as 5 billion people to have a smartphone by 2017.

At a discussion Tuesday moderated by journalist Charlie Rose at the Interactive Advertising Bureau MIXX Conference & Expo, Marc Andreessen, general partner at venture capital firm Andreessen Horowitz, and Sheryl Sandberg, Facebook’s chief operating officer, each mentioned that eye-opening number, as if to say: “Did you hear that? We said 5 billion people.”

The resulting opportunities on mobile will be unprecedented, said Andreessen, a Facebook investor and board member.

“We’re going to a level of ubiquity that we’ve never had before,” he said.

Trapped money

There’s a problem, though, amid all that hype.

“Most of the marketing money is still … trapped on the wrong side of the analog-to-digital transition,” Andreessen said.

So the challenge for the online industry is to persuade advertisers to accelerate, and complete, that transition, he said.

Sandberg reiterated some of the points made Monday by measurement chief Brad Smallwood — that only data can persuade advertisers to move the bulk of their budgets to digital, and Facebook is developing the tools needed to deliver that data.

“Our primary focus is on advertising and mobile,” she said.

The advertisers’ adjustment

There’s a learning curve on the buying side as well, Sandberg added. Marketers that are used to crafting broad campaigns directed at “large groups of anonymous people” will have to adjust for Facebook success.

“As businesses are able to build real relationships with customers, as they’re able to give customers what they want at the right time, and let them invite their friends, you can see the possibilities,” she said.

“Marketers have been talking about word-of-mouth for a very long time. This is word-of-mouth at scale.”

The pair touched on many more topics in the 45-minute chat, including Facebook’s troubled IPO, the mobile operating system battle and software’s potential to further change the world.

The entire chat can be seen on Facebook.

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