November 18, 2010

Facebook changing the online ecosystem

Recent studies show that Facebook is delivering 24% of all display ads available in the US online market each quarter – this mind blowing statistic is contradicted by emarketer’s finding that only 10% of ad dollars are actually being allocated to Facebook. Reasons for this could be :

  • Advertisers not realizing the scale of influence of Facebook in the online ecosystem
  • General uncertainty as to how to approach advertising strategies on social media sites such as Facebook, which were ultimately created to build relationships and facilitate human connections, not advertising
  • Relatively untested and traditional banner formats available

One thing is for sure, Facebook’s new messaging service and it’s joint announcement later today with Myspace (that I think may involve Myspace conceding defeat by opening up to using Facebook Connect ) is only likely to make Facebook even more attractive to users and advertisers alike !

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Posted by Rob Booth | Filed under: All, Media, Useful | 2 comments - read them or leave a reply

2 Responses to “Facebook changing the online ecosystem”

  • Hi Rob,
    The discrepancy here is easy to explain in a few different ways:
    A- facebook doesn’t run regular ad banners that have an established media value among publishers, agencies and advertisers.
    B- facebook runs only buttons which users can X to eliminate, which advertisers don’t necessarily like, also, NO ONE likes buttons, you’re stuck having to use Oxy 5 or Clearasil to get rid of them, nobody want buttons.
    C- users on Facebook are there to feel like their among friends, they don’t want / expect advertisers as part of the conversation, except for those they “LIKE” and get updates from in their news feed.
    D- they sell their inventory for under 1$ cpm, they effectively undervalue their highly targeted inventory wich 1- doesn,t work because of A- B- and C-, and 2- generates very little actual $ in ad sales compared to other sites/networks

    • Rob Booth says:

      Great points, Sam. And in addition, I stil think that many brands continue to put Facebook into a special niche ‘social media’ category when planning their online communications even though Facebook’s inventory comprises more than 600 million home page ad impressions available per month in Canada.

      It is definately a mainstream media in terms of inventory, but with all of the unusual quirks that you have eloquently outlined. I think for that reason alone, Facebook for many brands, falls into a separate ‘grey’ marketing zone entitled ‘what the hell do we do with it?!!’

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