Understanding The Power of Facebook Advertising
There is no question that Facebook’s core growth as a company has been established by its advertising prowess. But since the IPO debacle, Wall Street analysts have continuously questioned the future and power of advertising on Facebook.
Facebook’s biggest asset is the data it collects from nearly 800 million active users, and one that marketers and advertisers covet. Revenue generated from advertising will account for roughly 85% of the $4 billion Facebook expects to bring this year.
In order for Facebook to grow, it must continue growing its advertising base considerably. To put things in perspective, last year Google brought in almost $40 billion in ad revenue.
As Facebook’s growth in active users is stalling in developed countries, so are expectations for future growth in ad revenue. Potential advertisers are questioning whether advertising on Facebook is worth it, especially when it comes to mobile devices.
Many believe Facebook’s mobile presence will determine the company’s future as a longtime tech juggernaut and it remains to be seen how the company can monetize advertising on phones. Regardless, Facebook believes that it’s essential for any brand to invest in Facebook advertising.
Last week, in an attempt to attract more advertisers, Facebook released an infographic that explains the power of Facebook advertising. Whether more advertisers flock to the social networking site remains to be seen, but there’s no question that Facebook will have to continue show large growth in ad revenues if the company is going to be a tech juggernaut for a long time.