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Facebook's Self-serve Ad Prices Steadily Rising; SMBs Step Up to Meet Them

Facbook’s ads rose 40% per click last quarter, a new report by Efficient Frontier finds - a rise that topped prices on the social networking site for the previous three months. It was Facebook's self-service ads that posted the strongest increase - not the premium ads on home pages, Efficent Frontier's senior director of business analytics Siddharth Shah, told Bloomberg.

Self-service Ads Grow Faster

Interesting, this is the category - self-service ads which are typically purchased by smaller companies - that appears to be experiencing the most growth even as its prices rise. According to an estimate from eMarketer, Facebook earned $1.86 billion in worldwide advertising revenue last year, a 151% increase over its estimated 2009 advertising revenue of $740 million worldwide. The majority of that revenue - 60% or $1.12 billion - was earned from smaller companies, AdAge points out - companies more likely to be using self-serve tools rather than work through a media agency.

"Those advertisers are really juicing Facebook's growth," said Debra Williamson, principal analyst at eMarketer. (via AdAge). "They buy advertising in bulk. They've done it for years on Google, and now they're taking that expertise to Facebook."

These numbers - including speculation that Facebook’s revenues could hit $4 billion this year - should not be surprising. The company has hinted as much over the past several months that demand for its ad inventory was reaching new heights. To name one example, last year the company’s COO Sheryl Sandberg flatly said the site's ad traffic would post phenomenal growth even as its ad prices rise.

Some of Facebook's biggest advertisers boosted spending 10-fold and a few increasing spending by as much as 20-fold or more, Sandberg said.


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