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November 10, 2011, 4:39 am UTC
Digital advertising is one area that every marketer is interested in but is still trying to master the art of suitable investment. A new study has revealed most of the advertisers’ bank upon social media for placing their ads and Facebook is one property that no marketer can fail to spot.
More marketers than ever believe their brands should be engaging with consumers on social networks and advertising is an increasingly successful tool for doing so. As a result, worldwide social network ad revenues will surpass $8 billion in 2012 and approach $10 billion by 2013, according to emarketer.
Spending in the US will reach $3.9 billion next year, up from $2.74 billion in 2011. In 2013, US advertisers are expected to spend $4.81 billion on social network advertising, up 23.4% over 2012.
The study suggests that Facebook will get the vast majority of social network ad revenues. In 2012, Facebook will tally $5.78 billion in ad revenues, garnering 72% of all social network advertising revenues and 6.1% of worldwide online ad spending. In the US, it will account for 7.9% of all online ad spending that year. This year, it is expected to pass Yahoo! to become the No. 1 site in US display ad revenues.
Now, however, Facebook’s ad strategy is becoming clear. And it’s not only brilliant, it’s unexpected. Facebook’s strategy, like Google’s, is to not only improve its network and experience, but improve the advertising as well by making brand Pages better.
The reason you will have to buy ads on Facebook goes to the heart of why you need to advertise in the first place. The combination of the two reveals where Facebook’s thinking is going. Facebook is putting pressure on advertisers to create better content for their brand Pages. If they do, those brands will have a better chance of winning over friends of fans either by advertising or by creating something viral. It’s a cycle that has the potential to redefine the way we interact with brands. From now on, brands will be friends or friends of friends rather than spammers trying to bombard your consciousness.
Social media is still new, but so was search once. While figuring out how to make money off of search seems obvious in retrospect, it clearly wasn’t at the time. In the same way, someday we’ll look back at how Facebook invented social media advertising and wonder why no one thought of it sooner.
Facebook and Google get compared a lot these days, but with its new advertising strategy, Facebook is adapting Google’s ad strategy to its social media. Like Google, Facebook didn’t invent a category, it refined it. Friendster and MySpace predated Facebook just like Yahoo and Alta Vista came before Google. Like Google, Facebook figured that if it got enough people on board and continually improved its social network, eventually it would figure out a way to make money.
Facebook’s overtures at first were clumsy. Beacon, the advertising platform Facebook introduced in 2007, informed all your friends when you made potentially embarrassing purchases or rentals on Blockbuster and other retail partners and was eventually shuttered. Since then, Facebook seems content cashing in on its huge user base via display advertising.
Improving advertising on the popular social network is not a new or particularly innovative idea. Still the transition from advertising as a message-delivering medium to a platform for social sharing is a radical departure for Facebook. It could be the Facebook advertising solution that turns brands into better social media communicators and gets Facebook members to start recommending and sharing advertisers as much as they do they latest chat video.
It seems that the advertising numbers for Facebook will only get better but ultimately in the number game and rivalry bands and consumers will get the benefits of this evolving social media ad scenario.
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