I stopped using Facebook about a year to a year and a half ago. I can’t say that I really miss it, but I do know plenty of people that still love to use it. Before I left, and before I was even an advertising/public relations major, I noticed that whenever I typed something into my status update that the advertisements on the side would change. I found this interesting and would constantly type in random things just to see what the ad would change to.
Those who use Facebook tend to primarily use it to keep in touch with family or friends, so most of us don’t think of it as an advertising company. Well, it’s safe to say that they are just that, a mobile advertising company. Much of the success comes from News Feed advertising and their mobile app install advertising business (Lynley, 2014). With Facebook’s user base constantly growing, the data they pluck from their users will ultimately add to their ad revenue growth.
One of the genius parts of Facebook’s advertising strategy is the previously mentioned mobile app install advertising business. How this works is that Facebook puts an ad up with the mobile app install button and a brief description of what the app does and then app makers pay Facebook an average amount of $2.50 to $3.00 for every user that downloads their app (Lynley, 2013). While other sites do something similar for cheaper, Facebook is pretty much the king because of their reach and user base.
Under 4,000 app developers have used this service, but it has resulted in over 25 million downloads which accounts for 30% of Facebook’s overall advertising revenue (Lynley, 2013). Facebook COO, Sheryl Sandberg said, “We’re excited about the mobile app install ads, it’s a small but growing category” (Lynley, 2014).
What is interesting about the way Facebook has gone about generating revenue through advertisements online is that many other online businesses are struggling to make money with ads due to the popularity of ad blockers, which I admittedly use, or ease of ignoring the ads. For instance, if I’m listening to Slacker Radio and an ad comes on for my free service, I either ignore it by concentrating on something else or I turn down the sound for 30 seconds or so (which is a popular length for advertisements).
The idea of allowing app makers to pay you to put an ad on your site which leads to downloads for them is an interesting idea. We all use smart phones and we all use apps so while we may ignore the intrusive banners or commercials, seeing a cool app is more likely to get someone to click on that advertisement. This is something for all of to keep in the back our minds when going into an advertising field since Facebook seems to be onto something here!
Lynley, M. (2013, June 19). Inside the surprisingly non-evil ad system saving facebook’s business. BuzzFeed Business, Retrieved from http://www.buzzfeed.com/mattlynley/inside-the-surprisingly-non-evil-ad-system-saving-facebooks
Lynley, M. (2014, January 29). Facebook is now a very profitable mobile advertising company. BuzzFeed Business, Retrieved from http://www.buzzfeed.com/mattlynley/facebook-is-finally-a-mobile-advertising-company