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Facebook to Double the Ad Revenue but Call For Action Remains Feeble
Facebook to Double the Ad Revenue but Call For Action Remains Feeble
By: iMedia News Bureau

When Kantar, Market Research, Insight and Consultancy Division of WPP plc asked 2,574 shoppers about the impact of social networks on their purchase decisions, more people said that Twitter played a bigger role than Facebook - 35% versus 24%.

May be this difference is due to the usage model of both the networks, on Twitter users sign up specifically to Follow others while on Facebook "Liking" a brand is a secondary activity and merely injects that information into what is their primary social network use - socializing. While Facebook is good for creating buzz and engagement, Twitter's use is a little more black and white and the call to action clearer.

Despite of this difference, facebook’s popularity is far from shadowing and way taller than twitter. In April 2011 a website called All Facebook, the unofficial facebook resource claimed that “With Facebook ads increasing in popularity, it’s not surprising to hear that the prices have increased 40 percent per click during the past quarter. So does this mean revenue is on track to more than double this year?”

And recently according to eMarketer worldwide ad revenues for Facebook will rise 104% this year to $3.8 billion. As the social network doubles its advertising intake, it is also diversifying its revenue streams and adding dollars through other means, like Credits.

“Facebook’s revenue streams will continue to diversify, with ads representing a decreasing proportion of total revenue while other sources, such as Facebook Credits, will grow,” states Debra Aho Williamson, eMarketer principal analyst in the same report.

Total revenues at Facebook, which include those from advertising as well as Facebook Credits and other sources, will reach $4.27 billion this year, eMarketer estimates. That’s more than twice as high as the $2 billion Facebook is estimated to have earned in 2010. Ad revenues will make up 89% of the total this year, down from 95% in 2009.

The report further states that within the US, Facebook ad revenues will surpass $2 billion this year, accounting for just over half the worldwide total. US ad revenues will continue to rise at a rapid clip, but overseas ad dollars will represent 50% of the pie next year and a slight majority by 2013.

Regardless of a positive outlook, Facebook will continue to have to prove to advertisers that its products deliver results and on top of it the completion is rapidly catching up.

Twitter comes next to facebook and there is a lot of difference in the revenue but still advertisers are showing lot of interest in this second in command. It has so far managed to attract big advertisers such as American Express, Coca Cola, Nissan, HP and Starbucks, and companies such as Dell have proved they can promote their products well using Twitter even before it launched its promoted tweets program.

But the question arises that does Twitter’s advertising model have what it takes to keep the advertisers interested long-term? Also with Google+ coming into picture the advertising pie has definitely gone slimmer. The social Networking and revenue building road has taken a very interesting turn lately and now time will only tell that does Facebook has it in itself to get a sustainable growth in revenue?