Facebook sells about $1 billion of advertising every quarter and it’s still growing, putting it on course to sell perhaps $5 billion or more in ads in 2012.

But what are the limits to its growth?

TBG Digital CEO Simon Mansell decided to try and figure it out based on Facebook’s current numbers. (TBG sells and manages Facebook advertising.)

Once he’d finished figuratively scrawling on the back of an envelope, he found that Facebook’s current ad inventory could top out at $10 billion a year.

The data assumes that Facebook completely sells out its entire inventory of ad space—which it never has. It also assumes Facebook won’t increase the number of ad slots per page (which it is doing). It assumes CPMs (cost per thousand users) won’t go up, which they well might. It ignores mobile advertising, which Facebook doesn’t currently do but will begin imminently. And it assumes that there is no growth in users, which there obviously will be.

That said, here’s how Mansell calculated the number:

Facebook says it serves 798 pages per person, per month.

Assume 20 percent of these pages are on the homepage and 80 percent are on the rest of the site (marketplace inventory).

160 pages on homepage x 1 ad = 160 impressions per person per month on the homepage

Multiply that by 850 million users = 136,000,000,000 homepage impressions

Multiply that by a $2.50 CPM (“cost per thousand impressions”) = $340,000,000 / month. (CPM in the U.S. is more like $4. But global pricing would bring this down, hence an assumed $2.50.

638 pages on the rest of the site x 4 ads = 2,552 impressions per person, per month via marketplace.

Some pages have more than four ads but some have fewer, so assume four is the average.

Multiply that by 850 million users = 2,169,200,000,000 marketplace impressions

Multiply that by a $0.22 CPM = $477,224,000.

(CPM of $0.22 average taken from the TBG Digital Q4 Data report – based on a sample   size of more than 300 billion impressions in 205 countries.)

$340 million plus $477.2 million = $817 million per month.

Total ad revenue: $9.8 billion per year.

Let’s just call that $10 billion!

Source: Click here to visit businessinsider.com

Alongside a self service ad platform Twitter launched last week, the company also has a brand advertising platform, available to agencies and brands. new media age got an early look at the platform.

Following today’s announcement, Twitter and its partner American Express will start to help small businesses use the micro-blogging site to reach their audiences, without the need for big budgets and direct access to the site’s sales staff (nma.co.uk 17 February 2012).

The announcement has been communicated with a focus towards the long tail of small-to-medium businesses but, much like Facebook.

Alongside this, Twitter also has a platform that is designed to feel like a self-service ad platform but is designed to be used by bigger brands to create automated campaigns. Agencies will also be able to use the dashboard to create activity for multiple clients.

One such agency that has been working with the self-service platform is TBG Digital, which took new media age through a demonstration of how it works.

On entry to the ads platform, you are presented with the option to either run a Promoted Accounts campaign or a Promoted Tweets campaign.

The Promoted Accounts option, which results in the @brandname showing up as a suggestion of who to follow, has the options to set by location and keywords, such as people’s interests, dependent on what type of users you want to follow you.

To promote your brand using particular tweets, there are three options. First, you can select to appear in search results and can target this by keyword. Second is the option to select tweets to highlight, which will then appear in people’s timelines and can be targeted by demographics and keywords. Finally, you can also use the platform to select tweets to appear at the top of your profile, highlighting a key message, rather than it slipping below as more tweets are posted.

Once selected, you are taken to a page to filter the targeting and select budgets and frequencies. This is different for each format, particularly for the latter because you are just paying to paste a tweet to the top of your own profile.

For the search results, it works in a similar way to both Google AdWords and Facebook in terms of targeting. You need to know what keywords you want to target, for example “X Factor”, and then you can filter by region and sex.

or ads that appear in people’s timelines, you can either select to post only to people who follow you or to users that are similar to your followers. This ad could work well for a special offer or, because Twitter allows the option to set this to automatically promote each new tweet, it could help brands increase their reach to users who would be more likely to have an interest in following them.

At the moment, you have to manually set all the options and if doing this for a large brand with multiple messaging and target audiences, it would be a lengthy process. On Facebook, the option to optimize and change the ad content and targeting is a lot simpler and a lot more scalable.

TBG Digital is one of a range of agencies that have their own ad-targeting platform in which they use the ad APIs from companies such as Facebook to run and optimise ads in real time and on a much bigger scale. It is not yet known if Twitter will be releasing an API for these companies to use.

One major upside of using this service is that Twitter only releases its analytics dashboard to brands that are spending with them. The dashboard gives a good range of information, including engagement metrics and demographics. It is also very easy to understand and manipulate, with easily digestible graphics, which is not always the case.

Twitter clearly has its sights on the long-tail revenue from small-to-medium businesses, so it is wise to create such an intuitive analytics and ad platform because the people trying to get to grips with it will not always be well versed in digital data.

Once Twitter is comfortable with the ad platform, it can then work out, with the help of agencies and brands, how this can become scalable for bigger brands, without diminishing its simplicity and without creating too much disturbance for the actual users.

Source: Click here to visit nma.co.uk

The European Forum for Responsible Drinking (EFRD) has launched a campaign to help educate the industry on regulatory codes for alcohol brands but experts argue that greater industry-wide collaboration and transparency would help marketers keep abreast of how they apply to new channels.

Yesterday, the European Forum for Responsible Drinking (EFRD) launched a digital campaign to help marketers and agencies understand how codes of advertising should be applied to promote responsible marketing of alcohol brands.

It has created a website that aims to promote the updated common standards that it agreed on with the Distilled Spirits Council of the United States (DISCUS) last September (nma.co.uk 20 September 2011) in response to new marketing channels, such as social media.

Carole Brigaudeau, EFRD manager, said the guidelines and training tools on the website were designed to educate but are open to further interpretation as technology develops.

“Digital media changes all the time, so the guidelines cannot be too specific,” she said. “If they are, we risk not being able to future proof self regulation. We have a digital task force in place to question how to interpret rules for new media.”

Greater clarification and interpretation has been welcomed, but in order to better address the fast pace of change, industry experts believe greater collaboration and willingness to share practical case studies will help brands market more responsibly.

Last year, the ASA launched an investigation into the use of Facebook Sponsored Stories by alcohol brands after some agencies raised questions. The ad formats use information including user images within ad creative, which potentially breaks the ASA guideline to prevent people who look under age appearing in alcohol ad creative (nma.co.uk 8 July 2011).

Simon Mansell, CEO of TBG digital at the time, had to pause running ads in that format on Facebook while the guidelines were clarified.

According to Mansell, the EFRD website and tools were a good start. “However, I am not sure how they plan to keep up with all the social media issues,” he said. “For example, on Twitter you have to Direct Message people to check they are 18, which is not a very scalable solution, although I am sure Twitter will fix it soon. Agencies can find it difficult to keep up with Facebook and Twitter. Our agency, for example, has 121 people working on them – so regulators will need a real strategy to keep up with everything.”

At the end of last year, alcohol brand Jose Cuervo ran a campaign in which the online component allowed people to feature in a music video by band OK Go by signing into Twitter or Facebook. The technology then turned their profile image into a pixel and inserted into the video (nma.co.uk 25 November 2011).

In Brazil, where the campaign was focused, the age in which you can feature people in ad creative is 18 and over, but in the UK they need to look, and be proven to be, over 25.

Paul Jakimciw, group business director at Albion, the agency behind the campaign, said the Facebook API, which was used for the sign-in process, enabled ages to be screened, but a human layer of moderation was also used.

“Regulations can sometimes be very abstract and far from the reality of what people are trying to do,” he said. “It is difficult to translate to digital because the channel has so many variables compared to traditional marketing. There needs to be more appetite to share and learn at a broader scale.”

Source: Click here to visit nma.co.uk

You can now engage customers based on their Facebook activity – using additional targeting tied into what users read, watch and listen to.

How does it work?

Facebook has rolled out action targeting in beta which gives us access to social app-related information. For instance, we can target those who have listened to Justin Bieber, Sting or Metallica – delivering a very different person each time. It goes even further with an ability to target specific objects. For example, not only can we seek those who have read an article on Yahoo!, we can even home in on the news item they have viewed. To do this, all an advertiser would need is the Yahoo! application id and the object id of the article in question. Targeting doesn’t get much better than this!

What’s more, we can also target friends of users performing these actions. For example, you can reach out to the friends and family of someone who has read an article on the Washington Post Social Reader, expanding your reach dramatically.

It should be noted that any advertiser can target Facebook’s ‘built-in actions’ for any app that has been designed for them. Current built-in actions include listen, watch and read. So, it is possible to now target users of Spotify, Netflix and even the Wall Street Journal. All you need is the application id which is openly available. We are expecting more ‘built-in actions’ from Facebook in the near future.

Please be aware that only built-in actions can be targeted by everyone. If you have created a social (action-based) application then users of that application and its verbs can only be targeted by you. So, if you have a social game that has a ‘play’ action, only you can target its users.

What happens next?

We are now testing the impact of the above on Click through Rate (CTR), Cost per Click (CPC) and conversion metrics such as Cost per Acquisition and Cost per Fan. It’s a balancing act between finding the right Facebook users and the increase in costs that occur with laser targeting. Now is a good time to get involved as competition on this targeting method is minimal during beta.

A fracas emerges over the fact that not all daily Facebook users visit the company’s website. Advertisers tell us why that’s missing the point.

A fracas erupted on Tuesday over the number of Facebook’s actual daily average users. But it’s one that shed light on how Facebook is a publishing platform like none that has come before it, and may presage a turning point when the brand advertising world eventually stops placing such an emphasis on reach and starts valuing performance above all.

The brouhaha started when the New York Times’ DealBook noted that, though Facebook claimed 483 million daily active users (DAUs) in the IPO filing it submitted last week, the social network also said that not all of those people actually visit the company’s website on any given day. That number also includes users who access the service via its mobile apps and those who perform actions on a third-party site, like clicking the Like button next to a particular garment on a clothing retailer’s site or sharing a concert ticket purchase with their friends.

If fewer people actually visit the website, the DealBook article wondered, does that have implications for Facebook’s ability to monetize eyeballs? And if so, was this some shifty sleight of hand on the part of the social network to inflate its numbers and try to make itself appear more financially viable to potential stock market investors?

According to the people who should know–the people who advertise on Facebook–the answer is: Not at all. “For someone on the front lines of Facebook advertising, the daily active users has never been an issue,” Sid Shah, director of business analytics at Adobe (which recently bought Facebook advertiser Efficient Frontier), tells Fast Company.

Judging Facebook’s advertising revenue potential based on mass audience numbers, then, misses the fact that brands don’t advertise on Facebook the way they do in other media, like TV or print. Conventionally, bigger has been better, because marketers haven’t had an efficient way to place brand advertising in front of the specific audiences they cared about. So, instead, they looked for “reach,” seeking to buy up the largest possible audience. While they knew that only a sliver of those eyeballs would actually respond to their ads, the bigger the initial audience was, the bigger their sliver would be.

In the new world, however, brand advertisers can order up exactly the audience they’re looking for. “It’s not like when you buy an ad on Facebook, it runs across all users,” Matt Lawson, vice president of marketing for Marin Software, which places ads on Facebook, tells Fast Company. Instead, advertisers specify the specific people they want to see their ad–men aged 45 to 55 in Michigan who like NASCAR, for example, or women aged 25 to 40 on the eastern seaboard with at least one child.

In this world, once you’ve reached the scale of Facebook, size just doesn’t matter anymore.

“Advertisers don’t care how many daily uniques Facebook has,” Lawson says. “They care about how many impressions to the right audience they get.” And so far, Simon Mansell, CEO of TBG Digital, tells Fast Company, brands aren’t having trouble reaching that audience. “None of our advertisers are capping out,” he says.

What matters more, in this new world, is performance–how well the ads do in getting users to perform some action, like clicking a link or getting someone to Like a brand page.

Facebook is continually developing innovative new types of ad units, like Sponsored Stories, that leverage what it knows about who’s connected to whom on Facebook to create word-of-mouth-type ads that simply weren’t possible before a platform like Facebook existed. And they often work better than conventional display advertising. The social network is also continually refining its algorithms to match the right ads with the right users. As those ads deliver better results, Facebook will be able to charge more for them.

Because of that Marin Software’s Lawson says, “If they didn’t grow their users at all from here, they could continue to grow their revenue.”

And it’s those questions that preoccupy marketers today, says Adobe’s Shah, not how big Facebook’s audience is. Instead, marketers want to figure out the models for evaluating the ROI of individual impressions and actions. In traditional brand advertising, on TV or in magazines, there was no way to connect the dots between the display and consumer behavior. But now, increasingly, marketers are able to make those measurements. And it’s those numbers that will count most going forward, at least on a platform like Facebook, not total reach.

In the meantime, though, one of the main reason why agencies have been interested in Facebook’s number of users, Wildfire Interactive CEO Victoria Ransom tells Fast Company, was simply “directional,” to underline to clients that Facebook is a platform they need to think about. Whether the actual number of eyeballs on the site on any given day is 483 million or a lower number, she says, “It’s still a clear sign that Facebook is pretty dominant about where people spend their time, and that this is where brands need to be.”

And as for the fact that some of the people that Facebook counts as daily users are actually off gallivanting on other sites? Marketers actually see that as a plus. Sure, they might not be able to serve up advertising to those people. But they don’t have to–those users end doing their shilling for them.

“If someone purchases a product offsite, and they click ‘Share,’ that goes to their [Facebook] Timeline, and then their friends see it,” Adobe’s Shah says. That’s the holy grail of word of mouth. “It’s a positive for us.”

That activity benefits marketers (and Facebook) in another way as well. The more people share back to Facebook, the more the system knows about each individual user, and the more valuable targeting opportunities the social network can provide.

“They’re collecting more information about what we like and do and our behaviors than anyone’s ever been able to do before,” says Wildfire’s Ransom. “That’s the unique and amazing opportunity Facebook has. It helps advertising in the long run.”

Source: Click here to visit fastcompany.com

More than 30 million UK users. One in every seven minutes of average online time. Facebook’s compelling share of online audience time is something small businesses must now address proactively if they want to grow and communicate effectively with their customers.

For small businesses in particular, there is an opportunity to integrate your products or experiences onto Facebook. Doing this will ensure your brand gains its share of this populous and cost-effective channel and allows you to engage customers in a manner that fits with their underlying usage habits.

Many businesses already understand that the best form of advertising is through word of mouth among friends and peers. Facebook facilitates this viral method of sharing information by enabling businesses to broaden their exposure to and share experiences with their target audiences in a more relevant way – via Sponsored Stories for example.

Through Sponsored Stories fans not only endorse and engage with a brand by ‘liking’ or ‘checking in’, but they also actively participate in real time activities and promotions taking place. A good example is Sprinkles Cupcakes, which ran a campaign at the beginning of the year through which the first 50 people to whisper “2012” at any Sprinkles Cupcakes store received a free chocolate marshmallow. By targeting a more specific group, Sprinkles was able to engage in a personal way, both face-to-face in-store and online, where their promotional offer was initially passed on to 79 people, who all hit ‘like’ on the post, instantly sharing it with their own connections.

Many sceptics see social media campaigns on networks such as Facebook as interrupting users with large volumes of irrelevant material. However, if campaigns are deployed properly, results show that social media presents an opportunity for brands to initiate the conversation when their audiences are relaxed and receptive. The old days of mass targeting are gone. For businesses, Facebook, (unlike other advertising channels) is more about building relationships rather than getting new customers.

This is best shown through Sponsored Stories. Since their introduction in 2011, brands have been able to create adverts that include a social context i.e. John Smith likes Sprinkles Cupcakes, while also targeting customers according to their age, gender and interests. This approach and the effective use of Sponsored Stories have seen a measurable global trend, which we at TBG Digital have actively tracked as part of our quarterly Global Facebook Advertising Report.

In our report for the fourth quarter of 2011, which launched earlier this year, we stated that click-through rates had increased by 18% through 2011. But, what does this mean? Essentially, it means that adverts are becoming more relevant to the users who are being shown them. So advertisers are making the most of the targeting options available and improving their creative messages. Plus these new adverts are more engaging than the classic Facebook adverts. It seems that social is here to stay.

So, if you want your brand to seize the opportunities Facebook can offer, and connect with your target audience among Facebook’s 800 million active users, it is crucial that you not only have something relevant to say but that you really harness this new digital word of mouth route to market. With more than seven million apps and websites currently integrated with Facebook, now is the time to ensure you are one of them in order to have a valuable place in the online conversation.

Simon Mansell was named a Growing Business Young Gun in 2006 . He is CEO of digital marketing agency TBG Digital.

Source: Click here to visit growingbusiness.co.uk

Read Simon Mansell’s commentary regarding “Zynga shows the importance of friends” at FT.com. Excerpt below:

The companies’ interdependence could cut two ways, says Simon Mansell, chief executive of TBG Digital, a social marketing agency that counts gaming groups among its clients.

“In a negative way, they have a dependency there on one customer, which is never what you want,” he says. “But in a positive way, that business was created on the Facebook platform. As more businesses build on the platform, it shows what can happen when Facebook opens up to more segments.”

We can help you to create, refresh and enhance your Twitter profile page – and increase visitor engagement without increasing cost.

How does it work?

* Start with your header. Upload a prominent image that personalises your page, supports key brand messages and engages visitors right from the off.
* Next, customise your background. Choose something that supports your header image.
* Then get the best coverage for your best content at the top of your timeline with a promoted tweet. This will instantly deliver expanded videos, images, links and other choice content.

But this is just the beginning. Twitter is expected to become more platform-oriented, so it’s essential that your content is fresh, relevant and engaging now.

What do I do now?

Those of you already using Twitter’s promoted products can create an EPP for that account. So talk to us now about preparing assets for your new profile. And if you’ve not yet used TBG Digital to test Twitter advertising then this is a great time to start.

Get in touch for more information.

View TBG Digital’s EPP here: http://twitter.com/tbgdigital

As the world awaits Facebook’s imminent filing for its initial public offering of stock, the biggest question in the minds of investors and the rest of us is this: Can Facebook keep growing so fast?

Facebook has come very far, very fast, amassing more than 800 million users and earning up to $4.3 billion in revenues in 2011, double 2010′s gross. But in the end, the success of this most iconic IPO in nearly a decade depends squarely on whether Facebook’s breakneck growth looks to continue.

It’s no sure thing. After all, mighty Google missed fourth-quarter forecasts two weeks ago, knocking its stock down almost 10% the next day. Despite a slowly improving economy, some ad agencies and marketers said online ad spending growth slowed in the fourth quarter. (Others, it should be said–like Hulu CEO Jason Kilar today–said Q3 was slow and things picked up in the usually big Q4).

Although reports from comScore and social agency TBG Digital indicated Facebook’s advertising did well in the fourth quarter, they’re not conclusive. TBG’s report didn’t include one big game advertiser, probably Zynga. And the profit challenges of Zynga–whose social games are played largely on Facebook and which is believed to be one of Facebook’s biggest advertisers–came to light in its less-than-stellar IPO in December. The travails of such a large Facebook advertiser raise questions about whether Facebook’s revenue momentum continues. Indeed, the latest rumor of Facebook’s revenues, tweeted by CNBC’s Julia Boorstin on Monday, was $3.8 billion, noticeably short of eMarketer’s much-cited $4.3 billion forecast.

Only Facebook insiders know for sure if the company’s incredible momentum continues. And the filing–now seemingly on track for just hours from now following a board meeting today–may well banish any doubts. But no matter what the numbers turn out to be, I wanted to get a little more color on the company’s very recent advertising business than Facebook might be willing to share in its S-1. So today, I talked to a bunch of social marketing experts, mostly at agencies and marketing software and services firms.

The gist of their remarks: Some advertisers remain unconvinced that the new kinds of social-infused ads its sales force is trying to sell will work for their brands, making it uncertain the company met its own, no doubt ambitious fourth-quarter targets. But Facebook likely did better, perhaps much better, than its rivals in the fourth quarter. And even in the event that the company contracted sniffles during the fall cold snap, business is accelerating so far in the new year.

The ad experts also believe Facebook has only started to exploit the potential of its massive audience, with several more possible ad products and services to come this year. But they think the uneven rollout of those products also could make Facebook’s revenues volatile for some time to come.

In a little more detail, here’s what they’re seeing:

* Cory Treffiletti, chief marketing officer and cofounder of Amplify Social, a brand-focused digital marketing spinout from digital agency Catalyst S+F: “A lot of people [in digital advertising] said Q4 was the slowest quarter of the year,” he says, maybe because of the uncertain economy. While it’s not clear to him that Facebook suffered from that slowdown, spending plans for Q1 look promising. “People who have advertised on Facebook are still advertising on Facebook,” he says.

But one reason they’re continuing to advertise reveals the dirty little secret of Facebook ads: They’re cheap–which is to say, Facebook can’t charge that much for them because very few people click on them. They’re busy sharing and poking, not shopping. But Facebook makes a lot of money overall on the dimes and quarters those little ads on the right side of the page bring in because it sells a ton of them–which explains the comScore report that Facebook now leads onetime display-ad leader Yahoo by a mile now.

* Matt Lawson, VP of marketing for Marin Software, a management platform for search, display, and social ads: He saw no slowdown in advertising in Q4, at Facebook or elsewhere. “We saw spikes on Facebook that were similar to those in search,” he says, particularly on Black Friday and Cyber Monday. While two-thirds of Marin’s clients view Facebook as a medium best suited to brand advertising akin to television, the direct-response marketers looking for immediate purchases or registrations–the folks buying those cheap ads–spent the lion’s share of the ad money on Facebook.

* Digital agency executive who prefers to remain anonymous: “I’ve heard Facebook has had some challenges getting big commitments from some marketers” for the much more expensive (meaning lucrative for Facebook) brand ads sold directly by Facebook’s sales force. “Unsophisticated agencies are still buying a lot of this expensive inventory,” which goes for up to $12 per 1,000 impressions (CPM) vs. the 25 to 40 cents CPM that its self-serve standard ads get. That’s one reason Facebook’s ad executives have expressed confidence about these ads. But as Yahoo’s troubles have shown, a business that depends on big ad deals can be volatile.

* Jon Elvekrog, CEO, and John Manoogian III, chief technology officer of 140 Proof, a social ad company: The cofounders, who admit they have worked less with Facebook than with Twitter (thus the name, a play on the number of characters in a tweet), think Facebook is starting to emerge from a long bout with “Googleitis.” That’s the tendency of ad companies to create ad systems that look like Google’s, which is to say automated and focused on direct-response.

Such has been the case with Facebook’s ads until recently, they say, when the company has begun to see results from “a pretty big pivot toward a brand- and audience-centric approach” in the last six to 12 months, says Manoogian. Still, the pair thinks Facebook remains mostly dependent on direct-response ads, a business that Elvekrog notes “isn’t exactly broken” at close to $4 billion in revenues. “But that momentum may slow them from changing too much too quickly” toward the brand focus that Facebook COO Sheryl Sandberg and most ad folks think should be its ultimate mainstay.

* James Borow, CEO of GraphEffect, which makes social marketing software for brands and agencies: Facebook’s social ads, such as Sponsored Stories, which turn someone’s Like of a brand into an ad shown to their friends, started taking off last year, he says. “Brands are really starting to embrace Facebook as an always-on medium a lot like television,” says Borow. As a result, he says Q4 was the best yet for his company, largely because of Facebook’s success.

* Roger Barnette, president of ad management platform IgnitionOne: Most of his clients are not brand advertisers but direct marketers, which need to drive potential customers offsite to complete a purchase. “Facebook just doesn’t do that well on those types of campaigns,” he says, because users prefer to stay on Facebook when they’re there. Barnette is starting to see some traction in Sponsored Stories, which brands use to get people to visit their Facebook Pages. “But it’s early days, so there might be some ups and downs.”

* Patrick Toland, U.S. managing director of Facebook ad platform TBG Digital: “All of the biggest Facebook advertisers are increasing their spend,” he notes, from companies seeking credit-card applications to social game makers trolling for new players to brands that want to turn people into fans of their Facebook Page. One client, he says, is upping its Facebook ad spend from $4 million a month recently to $15 million a month in February. Another is increasing planned Facebook spend from $8 million last year to $20 million in 2012. “We’re not seeing any slowdown in the business,” he says. “If you’re going to advertise in social, you’re going to advertise on Facebook.”

What’s more, he thinks Facebook is just getting started. In the coming year, Toland thinks Facebook will roll out more diverse ad units, perhaps along with a self-serve option that would make it much easier to place ads. He also thinks Facebook will launch mobile advertising as well as an ad network like Google’s AdSense.

* Blake Cahill, CEO of ad agency Banyan Branch: He has seen a big increase, often a doubling, of ad spending by his clients, though not necessarily out of enthusiasm for Facebook. “They need to spend more in order to get their messages through in people’s news feeds, because there’s just much more content coming at people,” he says. But they’re also getting results: One client spent five figures on a contest on Facebook and netted 50,000 new fans in recent weeks, an amount he says would have taken a couple of years to get without the ads. To handle the additional demands, Cahill just hired someone dedicated to media buying and placement for Facebook campaigns.

Source: click here to visit Forbes.com

Source: http://mashable.com/2012/01/16/facebook-offers-ad-discounts

Sam Laird
17th January, 2012
Mashable

Facebook offered advertisers a discount of as much as 45% on cost-per-click rates if they directed users to other Facebook destinations rather than to external websites during the fourth quarter of 2011, according to a report by marketing agency TBG Digital.

The significant incentive for advertisers to help keep Facebook users on-site appears to reflect a push by the social networking giant to solidify its status as a web within the web, with Facebook as the nexus for the majority of people’s online activity.

But, one TBG executive tells Mashable, the reduced rate also shows the potential success for brands advertising within the platform.

“Though one could suggest that Facebook is rewarding advertisers for keeping people in the Facebook environment, it also indicates that keeping ads within Facebook is more effective,” Patrick Toland, director of TBG’s North American operations, said in an interview.

Because only ads users click on make Facebook money in the cost-per-click market, it serves the network’s interest to facilitate advertisements with a higher success rate. And ads that integrate more smoothly with the Facebook experience have a set of built-in advantages, said Toland.

“If you’re there trying to catch up with old friends and suddenly an ad wants you to leave Facebook and change your path, that’s much less effective than an ad that just asks you to ‘Like’ Spotify, for example,” he said.

The overall cost-per-click ad rates rose by an average of only 1% between the third and fourth quarters in the major territories of the United States, United Kingdom, Germany, France and Canada. In the cost-per-impression market, meanwhile, Facebook ad rates increased by 8% from the third to fourth quarter and 23% since the year’s first quarter in those same countries, according to TBG.

Toland said that the rate increase for cost-per-impression ads combined with the relative stability of Facebook’s cost-per-click market is another indicator of its apparent advertising success.

The TBG fourth-quarter report also showed an overall improvement in user engagement over the course of 2011. In the five major territories mentioned previously, the overall click-through rate increased by 18% from Q1 to Q4. The average increase from the third to fourth quarter was 7%.

Toland said that TBG’s findings show that advertising based around social connections and social sharing — key to the success of Facebook’s impending IPO, which could come as soon as May — appears to be catching on with consumers and advertisers alike.

“People seem willing to participate in that process of sharing what they’re doing, whether it’s watching movies, reading articles or liking major brands,” he said. “The willingness of advertisers to participate in social-by-design advertising will enable Facebook to continue to succeed on that platform, which is unique to Facebook.”

The TBG report studied more than 326 billion ad impressions by 266 clients in 205 countries.