A quick recap on where Facebook stands in Advertisement Revenues. According to the latest data released by comScore, Facebook has edged out Yahoo, the leader in Banner Ads as of Q1 2010.
Facebook is expected to bring in more than $1 billion this year(2010) in revenues, according to WSJ article citing people briefed on the matter. Yahoo earned $6.5 billion in revenue in 2009, mostly from advertising.
As I had predicted in my blog posting earlier (Facebook, $1 Billion Company, July 2009) “Social-Context Ads” offer marketers unmatched value proposition when it comes to the following:
- Increasing Ad Awareness
- Building Brand Loyalty
- Initiating Purchase Intentions
All of which can be accomplished under finer control, better targeting and higher ROI on Advertising dollars. According to comScore, the average price of display ads on social-networking sites is about one-sixth the price on the rest of the Internet.
Looking back Facebook has delivered better than expected results and my projections of hitting $1 Billion revenues by 2014 seems overly pessimistic. Kudos to them on the perfect execution….. what about User Privacy Rights one might argue?
It is my belief that as individuals we are all driven by the pursuit of profits(benefits) and maximizing our utility from engaging in any kind of activity. As long as the benefits from participating on Facebook far outweigh the risks associated with privacy rights, individuals will continue to both participate and share information with others. The jury is still out and time will tell…….
For further reading on Facebook’s Advertising business and limitations of traditional online advertising check out these links:
- Facebook Touts Selling Power of Friendship, WSJ, July 7th 2010
- <a href="http://blog.facebook weight loss tablets.com/blog.php?post=403570307130″>The Role of Advertising on Facebook, Facebook Blog, July 6th 2010
- How to Build Brands Using Online Advertising, comScore, July 7th 2010