In just a few short years, consumers have made Facebook a go-to location and marketers have followed with their online ad budgets. Between 2009 and 2011, analysts believe the firm’s ad revenues grew from an annual $740 million to an estimated $3.8 billion. Despite Facebook’s popularity, marketers can turn to many other online destinations to spend their ad budgets. As a result, Facebook is using a number of techniques to keep marketers and users connected to their online universe.
The large global ad agency, TBG, recently looked at Facebook’s ad strategy. In its analysis, TBG considered 326 billion impressions, several countries and multiple clients. To determine user activity and engagement with these ads, TBG focused on the U.S., Canada, France, Germany and the U.K.
During the course of 2011, analysts found click-through rates on Facebook ads increased an average of 18% which is good news for marketers. The analysts also revealed that a significant portion, 70%, of Facebook’s ad revenue stems from only 5 sectors as the following figures show:
- Finance 18%
- Food and drink 15%
- Retail 13%
- Games 13%
- Entertainment 9%
For media space providers, keeping users on a property is important. Facebook is enticing marketers to design ads that stay on property by offering a 29% discount on a cost per click (CPC) basis. In addition, when marketers use the Fanning and Facebook App campaigns to keep traffic in Facebook, they can score up to 45% off on their CPCs. Marketers should realize, though, that the cost of online advertising rises during the traditional holiday season. For example, between November 21, 2011 and December 17, 2011, the CPCs rose 55.7%.
Overall, the information compiled by TBG shows strong ad revenue growth for the globe's leading social media property. More detailed data on Facebook’s revenue picture will likely become available when the company files its S‑1 form in advance of its expected IPO sometime within the next few months but marketers will no doubt continue to buy advertising here, especially when the rates are discounted.[Sources: Global Facebook Advertising Report. 2012. Tbgdigital.com. Web. 23 Jan. 2012; Hof, Robert. Ahead of May IPO. Forbes.com. 16 Jan. 2012. Web. 23 Jan. 2012]