AdAge reports and rounds up some of the Facebook ad revenues data that have come out in the wake of the Goldman investment in the social network. However here’s the interesting part of the article:
[W]hat is surprising is the majority of revenue, 60% or $1.12 billion, was earned from smaller companies in 2010, those more likely to be using self-serve tools rather than work through a media agency. That’s greater than the $740 million coming from major marketers like Coke, P&G or Match.com.
These are unlikely to be traditional small businesses. Regardless it’s very interesting.
The article presents this finding as a threat to Google, allegedly because these are the same “self-service” advertisers that built Google. In practice, however, Facebook ads and Google complement one another and the former doesn’t replace search advertising.
However Facebook could develop ad units that truly appeal to SMBs. Deals is a work in progress. Yet Facebook in some ways is much better positioned to get ad dollars from SMBs than Google is, even with Tags and Boost.
Related: Facebook Drives US Social Network Ad Spending Past $3 Billion in 2011
January 18th, 2011 at 4:12 pm
[...] This post was mentioned on Twitter by Greg Sterling. Greg Sterling said: Majority of FB Advertisers S & M Sized: Report http://bit.ly/hT4cpj [...]
January 18th, 2011 at 5:56 pm
[...] most of that ad money seems to be coming from small and medium-size businesses. From Greg Sterling… AdAge reports and rounds up some of the Facebook ad revenues data that have come out in the [...]
January 19th, 2011 at 1:18 am
Is there any information on number of advertisers or any indication of churn rate for advertisers?
January 19th, 2011 at 3:00 pm
I saw nothing on churn. I don’t really know how that would be measured because most advertisers, especially small advertisers, aren’t going to run persistent campaigns on FB.
January 19th, 2011 at 4:52 pm
Greg:
I’ve seen anecdotal evidence of churn. The examples I saw were DYI smb operators that used Facebook ads, didn’t have experience in running web based ad programs, didn’t watch the ad campaigns and spends, and ended up spending a lot of money in an arena that didn’t work.
I have yet to see any type of publicity on the issue; the type of publicity that came out from dissatisfied/unhappy smb operators that weren’t happy with the Groupon experience is the type to which I’m referencing.
Even if that type of publicity emerges it probably wouldn’t stop or slow the usage of Facebook advertising; just as that type of publicity hasn’t put a dent into Groupon or its hundreds (thousands) types of followers.
The smb market is huge. More will try Facebook. More will be sold on it. I suppose that doesn’t make either one of them different from hundreds or thousands of other marketing programs that preceeded them.