Report: Facebook Now Serving 31.2 pct Of U.S. Online Ads

[engine]

Facebook Now Serving 31.2 pct Of U.S. Online Ads [comscore.com]

comScore, Inc. (NASDAQ: SCOR), a leader in measuring the digital world, today released an overview of the U.S. online display advertising market for Q1 2011 based on data from comScore Ad Metrix, indicating that nearly 1.11 trillion display ads were delivered to U.S. Internet users during the quarter. Facebook accounted for 346 billion impressions, nearly double the number it delivered in Q1 2010, and accounting for nearly one third of all display ad impressions delivered.

“The U.S. online display advertising market maintained its strong momentum from last year with a terrific first quarter,” said Jeff Hackett, comScore executive vice president. “We are now seeing more than one trillion display ads delivered every single quarter and nearly 300 individual advertisers spending at least $1 million a quarter on display, numbers which underscore just how large and vibrant the online medium has become. And it’s not just about the volume but about the quality of the advertising experience that can be delivered as we see continued investment in compelling, high-quality creative that helps cultivate long-term brand equity.”

Facebook Ranks as Top Display Ad Publisher in Q1 2011

Popular social networking site Facebook.com led all online publishers in Q1 2011 with 346 billion display ad impressions, representing 31.2 percent market share. Facebook’s market share has increased 15 percentage points from 16.2 percent in Q1 2010. Yahoo! Sites ranked second during the most recent quarter with 112 billion impressions (10.1 percent), followed by Microsoft Sites with 54 billion impressions (4.8 percent) and AOL, Inc. with 33 billion impressions (3.0 percent).

[Sgt_Kickaxe]

Nope, the 500 a day my 11 year old niece is forced to see with every farmville page refresh doesn't count!

[defanjos]

They may be serving the ads, but no one is clicking on them.

I've been running a test ad there, got hundreds of impressions, not even one click. The same ad on Adwords would have given me many clicks.

[StoutFiles]

So that's 31.2% of the available ads that are utterly worthless.

[jecasc]

I guess facebooks is not good for clickthrough but only for raising brand awareness.

[Leosghost]

Well to all those who asked which half of their ad budget is totally wasted, ..now they know where at least 60% of that half is being wasted.

Facebooks data is a goldmine ..but display ads are not the tool to exploit the seams.

The tools to do so require ultra precise targeting

( and being able to use them will probably need some radical adjustments to what is legal re "privacy" and sale of user data ..such adjustments will probably happen..if facebook lobby^^^^^greases enough palms of "lawmakers" ..the question is will their backers continue to back them until the relaxed data privacy laws they need are in place? )

..and Google has a head start on exchanging "free" services for relaxed privacy for data and mining the results...and allowing others via adwords to mine alongside them..and Google is already in net profit ..and has a warchest.

MS has the money ..but MS partners to assimilate ..witness its past ..and what has happened and is happening with Nokia ..and what has happened and is happening with Yahoo*..

*I do not see Yahoo "independent" in 5 or 10 years..

Even Apple could buy them now "cash on the nail" ..if they wished to get into search..

[walkman]

They may be serving the ads, but no one is clicking on them.

Some are but no where near enough. FB needs to show it can make money for the IPO so they are showing 5 ads for each page. The thing is that they have a lot of data and as advertisers move there, ads can be more targeted. Remember that Google makes a lot more from clicks than Bing simply by having a better ad algo. That can be changed since FB is attracting many Googler$.

Definitely a threat for others and finally an opportunity for advertisers. Hopefully they release their adsense too in time. We need Bing, FB and Amazon to compete with Google. Payouts and especially support will be improved.

[randle]

Those numbers are pretty impressive for sure, but I stopped spending advertising dollars based on impression counts 9 years ago.

Maybe its different for large companies just trying to build brand, but for us, profiting from on-line advertising is all about clicks, that turn into conversions. Without a click, you can't convert. All the rest is just expensive digital wall paper.

[johnnie]

Facebook ads are good for building brand, but that's about it. Don't expect clicks, let alone conversions.

[trinorthlighting]

People do not go to facebook to click on ads and shop, they go to play games or social network. I would venture to say most users do not even look at the ads.

[BillyS]

Impressions are meaningless except for building hype. FB has a small niche, very small. Anyone that has done some serious advertising (I have), knows that quality of traffic counts.

FB will be issuing an IPO soon. They need to because the network will soon collapse under its own weight. Count on it.

There is extreme pressure in corporate America to have a FB presence. Why? Because like lemmings into the sea, everyone else is there so we need to be there too or we might miss something. No one is going to tell their CEO they're not on FB, that's silly. Right? Better safe than sorry. ;)

[koan]

People do not go to facebook to click on ads and shop, they go to play games or social network. I would venture to say most users do not even look at the ads.

You could say the same about TV, radio, newspapers, yet ads still work on those mediums, from the big corporation wanting to raise awareness about a product and build a national brand, to the used car salesman promoting his week-end special in the local newspaper. It's not always about a click and instant conversion.

[sundaridevi]

3....2....1.... Google rules... Blah blah.. Facebook sucks.... blah blah.. I am a dinosaur..... Blah blah.... I don't understand new trends in technology.... blah blah.... Adsense.....

Ditto that.


AdSense Marketing strategy
1. find a keyword
2. buy adwords
3. get clicks
4. pay a lot of money
5. repeat the incantation, "i made easy money, google rules, google rules, google rules, i made easy money, google rules, google rules, google rules"


Facebook Marketing strategy
1. put your adwords ad on facebook
2. target everybody, their brother and their sister too (more impressions means more clicks right? just like it did with Google in MCMXCIX)
3. see no clicks
4. repeat: facebook sucks, facebook is stupid, facebook is for children

[BillyS]

You could say the same about TV, radio, newspapers, yet ads still work on those mediums, from the big corporation wanting to raise awareness about a product and build a national brand, to the used car salesman promoting his week-end special in the local newspaper. It's not always about a click and instant conversion.

Each channel has its niche, but I'm talking about the efficiency of the platform.

[frontpage]

@ BillyS -- Your opinion is not consistent with facts or reality.

FB will be issuing an IPO soon. They need to because the network will soon collapse under its own weight. Count on it.

Versus

1) Several figures close to Facebook’s finances told The Wall Street Journal that they thought its profit was growing at a fast-enough rate to justify a valuation of $100 billion or more when it goes public

2) At the start of this year Goldman Sachs invested $450m in Facebook in a deal which valued the US social network site at $50bn. Russian group, Digital Sky Technologies also invested $50m at the same time, taking its total holding to more than $500m.

3) Facebook is on track to exceed $2 billion in 2011 earnings before interest and taxes, depreciation and amortization, or EBITDA.

4) In 2011, Facebook expects to collect $4.05 billion in worldwide advertising revenue.

5) The company's revenue forecast represent 117 percent growth compared with revenue of $1.86 billion in 2010, and more than five times its $740 million revenue in 2009.

6) For 2012, the forecasted figure is $5.74 billion in global revenue, a 678 percent increase from 2009.

7) The social networking giant now controlling a third of the (online ad) market and gaining in excess of 346 billion impressions – almost double what they received in 2010. With Microsoft losing 10% of their display advertising impressions and Yahoo shrinking by almost 15% (19 billion impressions in real terms).

5) [i.dailymail.co.uk...]

Rapid growth: In the first quarter of this year, 30 per cent of all online display adverts were on Facebook, a much higher proportion than their rivals

[cfx211]

If Facebook has so much inventory, why is the CPC so darn high? Almost all of my Facebook advertising has been geotargeting + a cluster of likes that indicates someone is from a certain part of the world. For that I am paying over $1-2 a click and getting a 10 times higher CPA vs. other channels.

I have seen other sites/platforms have to devalue their CPC dramatically when faced with a glut of inventory and very few conversions yet Facebook CPC is still creeping higher and higher, probably because more mainstream big advertisers keep jumping on the site and pushing up prices with branding campaigns.

Their campaign management UI is also woefully inadequate to be taken seriously as a major platform. The amount of manual work required in targeting ads is a big drawback. I don't have a problem putting the work in, but I am not putting the work in when a platform has proven itself to be a poor converting, expensive source of traffic.

[sundaridevi]

I have seen other sites/platforms have to devalue their CPC dramatically when faced with a glut of inventory and very few conversions yet Facebook CPC is still creeping higher and higher, probably because more mainstream big advertisers keep jumping on the site and pushing up prices with branding campaigns.

Probably because the big advertisers have more accurate ways of measuring their ROI. What I'm seeing over and over on the social media discussions here is that if you don't understand traditional marketing in traditional media, then you won't be able to make Facebook work.

[cfx211]

Probably because the big advertisers have more accurate ways of measuring their ROI. What I'm seeing over and over on the social media discussions here is that if you don't understand traditional marketing in traditional media, then you won't be able to make Facebook work.

I would say it is the opposite. I consider myself a fairly sophisticated advertiser, but one who does not have room in my ad spend for "fuzzy" ad spends. Every dollar I spend needs to return results for me. I can't spend money buying goodwill or awareness at the $1-2 CPC levels I see on Facebook for my demos.

A big advertiser (especially one whose main channel is offline, say a Toyota or the Gap), has plenty of room in their budgets for branding or awareness campaigns. Facebook is good for them because there can be a measurable component to their online spend (look 20,000 people now like Toyota Hybrids), but Facebook will not tell Toyota how many Priuses were bought because a Facebook ad cannot measure that.

So if traditional media is launching national ad spends aimed at target demographics without being able to measure the direct correlation between a spend and sales, then yes Facebook is better for traditional marketers. That however is the exact opposite of more accurate. It just means they have always been used to ad buys without accountability.

[sundaridevi]

So if traditional media is launching national ad spends aimed at target demographics without being able to measure the direct correlation between a spend and sales, then yes Facebook is better for traditional marketers. That however is the exact opposite of more accurate. It just means they have always been used to ad buys without accountability.

A lot of assumptions here. I didn't talk about how one might measure ROI more accurately. Nor do I believe that every big advertiser is only looking for awareness. But for the rest of what you said, I think what you are describing is the thing that people here who are used to PPC advertising find frustrating; it's more difficult to correlate ad spend with sales. If that is the case, and you don't want any "fuzzy" ad spend, then you have exactly one marketing channel; Direct Marketing. That's fine, but you might as well know it for what it is. And maybe we can say that direct marketers may find Facebook marketing more challenging than what they are used to.

[cfx211]

But for the rest of what you said, I think what you are describing is the thing that people here who are used to PPC advertising find frustrating; it's more difficult to correlate ad spend with sales. If that is the case, and you don't want any "fuzzy" ad spend, then you have exactly one marketing channel; Direct Marketing. That's fine, but you might as well know it for what it is. And maybe we can say that direct marketers may find Facebook marketing more challenging than what they are used to.

Almost but not quite. I do run my fair share of banner campaigns aimed my target market, but I can get them at a CPC that returns an acceptable CPA. What's the difference between marketing to a non resident Indian on a bollywood website vs. on Facebook? I can get bollywood CPCs for a fraction of the cost of Facebook and make the buys work.

My point is that while Facebook can offer strong targeting abilities, for me and many others it does not deliver results to justify the premium it puts on CPC. I have no problem playing the Facebook game, just not as these returns.

[Brett_Tabke]

There are companies just killing it on Facebook. That ability to target on Facebook is unmatched. There is a learning curve though - it aint AdWords or AdSense here. You have to use a much more sophisticated level of targeting beyond simplistic keywords. I know of several companies that are getting significantly higher conversion rates on FB as opposed to G/Bing.

[skibum]

You could say the same about TV, radio, newspapers, yet ads still work on those mediums, from the big corporation wanting to raise awareness about a product and build a national brand, to the used car salesman promoting his week-end special in the local newspaper. It's not always about a click and instant conversion.

It is important to think about the state of mind of people in different advertising mediums.

In search they are actively engaged in searching for something. If an ad is relevant then the person will clicks on it if it helps them get what they want.

When it comes to TV people are more passive and expect a break in the show to see some commercials. While they are not actively engaged looking for whatever is advertised they are not actively searching for or engaged in something else. People may get up and walk away during commercials but generally they will be more open to watching them as opposed to trying to do something else with the TV.

Newspapers are more like search, people are actively engaged in reading or skimming information and an ad might fit in with what they have an intention to do while reading a paper or magazine. They are also not engaged chatting with people and catching up on the latest gossip from their friends as they are on Facebook.

On Facebook (or twitter) people go there mostly to look at pictures, post what they had for breakfast and that the new dog pooped on the carpet or play games. They generally don't go there to shop and are engaged in activities that usually have nothing to do with commerce or wanting to take an action other than mindless activity unless they are trying to figure out why nobody is clicking on their ads and why.

If FB gets down to the level of being able to parse language and see in someones stream of activity that they just asked their friends where do you get, is x better than y, and then show an ad that answers that question, aka search then maybe Facebook ads will start to work outside personals and games.

[cfx211]

There are companies just killing it on Facebook. That ability to target on Facebook is unmatched. There is a learning curve though - it aint AdWords or AdSense here. You have to use a much more sophisticated level of targeting beyond simplistic keywords. I know of several companies that are getting significantly higher conversion rates on FB as opposed to G/Bing.

I am game to get more sophisticated. For those who are making FB work for them, what does work for you?

I have failed by geotargeting at the country level and using precise interest targeting grouping together a whole bunch of interests that are common across my demographic and running multiple creatives.

Broad interest targeting will not work for me because it has a western orientation that ignores my target market.

Language targeting would be great for me except that there is no inventory for my target languages. My customers tend to speak their native language and read/write in English.

I can see both age and relationship targeting as being good places to test refinements. Stripping out younger and single users could remove a group that is more likely to use an alternative to my product.

Education and work: Again these are good places to see if I can eliminate less affluent customers.

Male/Female: This just sounds like an A/B test.

So if I were to become a more sophisticated FB advertiser, the first thing I would do is to reactivate my campaigns keeping my targeting the same, but slicing and dicing by age, sex, education groups to see if there is any difference in performance amongst them.

Assuming I get a better response from one vs. the other, I would then take the better performing group and start messing around with my precise interest groupings. It would be nice if interest targeting worked in an A and B manner rather than A, B, or both manner.

I can also look at testing between CPM and CPC buys or bidding down my campaigns.

Those sophisticates amongst you, is this the right approach? Have you found that some targeting parameters are useful and others are red herrings?

[votrechien]

Full credit to Facebook's sales team and advertising software for this accomplishment.

[sundaridevi]

Have you found that some targeting parameters are useful and others are red herrings?

@cfx211: If you don't even target by age group, scroll up to my post that says

repeat: facebook sucks, facebook is stupid, facebook is for children

Geotargeting, for some products is a given. Like if you are selling english language books from a us warehouse, probably you are only going to target usa and canada. But that is really the bare bones. Everybody so far I talked to about facebook not working has no idea what demographic actually buys their product. Until you know that, save your money or give it to Google

[walkman]

One example of FB targeting: Suppose you finished college for computer science and FB knows because you said so.
One, college ads are out, and two master degree ads are in. Three, the masters degree can also be relevantly displayed most CS students go in for...

That's not something to be laughed at.

[cfx211]

@cfx211: If you don't even target by age group, scroll up to my post that says

repeat: facebook sucks, facebook is stupid, facebook is for children

Geotargeting, for some products is a given. Like if you are selling english language books from a us warehouse, probably you are only going to target usa and canada. But that is really the bare bones. Everybody so far I talked to about facebook not working has no idea what demographic actually buys their product. Until you know that, save your money or give it to Google

I should have clarified, I am age targeting everyone 18 and over.

Let's try a different track here, because maybe I did not do a good job of explaining my FB marketing problem and right now I am trying to make FB work for me not bash it.

Our customers are people from country X who now live in country Y. It's a niche product in that respect, but amongst that group of people our product is used across an entire gamut of age/sex/education etc...We have had success marketing our product via display ads simply by getting in front of people from country X who now live in country Y.

I took this approach to FB by putting together a group of interests that are fairly specific to people from country X. I then geotargeted the ad to people who live in country Y. I then age targeted to people 18+ because kids don't buy our product, but college students do. Let's say this gave me 500k people and I am assuming that they are my known universe.

I ran a 2 week campaign in January and got a 0.7% conversion rate (which is comparable to semi-targeted display campaigns I run), but returned a $160 CPA which is 5x over a comparable display campaign. The problem? CPC was in the $1.20 range which is also 5x what I pay for display.

Now I hope you understand my original gripe about FB. I am paying a 5x premium on clicks for a comparable level of performance to display.

The campaign was turned off not only because of the high CPA, but because FB only brought me 20 new accounts. The sample size was large enough to tell me this test was a dog and to take my money elsewhere. Had FB delivered 500 accounts at that CPA, well I would have sliced and diced to optimize the campaign down to a more reasonable CPA but it didn't deliver enough volume to justify that.

So in summing up my problem:

A. I need to identify my target market by collecting a bunch of precise interests because I cannot think of a way to identify someone as originating from country X otherwise.

B. Combining Step A with Geo and basic Age targeting gives me a fairly large universe of 500k users, but FB wants $1-$1.50 a click for them.

C. FB delivers the same conversion rate for me as display but at a 5x CPC.

D. FB was not returning enough new accounts to warrant optimizing my campaigns.

To make my latest pass at FB work, one or more of the following needs to happen:

A. My universe of potential customers needs to expand. It could probably max out at about 1 million based on what I know about my customer base and FB usage in the US.

B. CPC needs to be brought down.

C. Conversion rate needs to increase upwards of 2-3x.

D. Realize that even though FB might be 1/3rds of ads served, realistically it will probably max out at 5% of paid accounts for me, and to get those effectively I will need to cut up my known universe into a lot of demographic slices to find the few that will accomplish B&C.

D. Change my view of FB from direct conversions to thinking of it as a seeder for my remarketing lists. This can only happen if B occurs.

So enlighten me Facebook sophisticates...

What practical advice do you have for this hayseed neanderthal marketer as he tries to effectively hunt the swift gazelle of social marketing after years of feasting upon the lumbering mammoth of adwords/adsense?

[CainIV]

Facebook needs to launch a full bonified web search integrated into the system. That would seriously move some heads.

[cwnet]

@cfx211 sophisticated advertising is not only about sophisticated targetting but also about sophisticated measuring of effectiveness.

e.g. sophisticated measuring means to look beyond the channel you are using:

"display advertising significantly lifts Online search activity. The study demonstrates that consumers exposed to display advertising were more likely to search for brand terms (i.e. automotive manufacturer), and segment terms (i.e. vehicle class), than unexposed consumers."

I am sure you find the study 'Display Ads Lift Searching"

[cwnet]

see also: Display Advertising Impact: Search Lift and Social
Influence