Facebook ads are effective

Not surprising at all. Ad buyers have an immense amount of control over how much is spent and targeting, and with all the user-provided information Facebook can seriously drill down and find an audience for any campaign.

From the link:

Chances are that at least one or two will be targeted to the activities and interests you post on Facebook, or the city you live in, your gender, or even your relationship status. These little ads are typically purchased through Facebook’s “self service” system, which enables small- and big-time advertisers to create an ad in minutes to lure specific demographic groups with a few lines of text and a graphic or photo.

Rather suddenly, these little come-ons have turned into the leading source of Facebook’s revenue. My estimates, as an analyst at eMarketer, the New York-based market research firm, show that self-service ads account for at least half of Facebook’s total ad revenue, projected to be $1.3 billion this year. That’s way more business than anyone could have expected, given that there are no upfront charges to placing these ads and that Facebook only earns revenue when viewers click on them or when a certain threshold of impressions is reached.

 

Social networking advertising tops $1.5B

And not surprisingly Facebook is getting half of the $1.68 billion in social media/web 2.0 advertising forecasted for 2010. Facebook offers a very attractive advertising model in terms of very granular audience targeting coupled with a flexible set of criteria for creating an ad campaign. Expect to see more advertising dollars going into social networking in the future, particularly if it proves out to be very effective.

From the link:

Just after Facebook hit 500 million users last month, some analysts increased their 2010 forecasts for spending on social media advertising.

U.S. advertising is expected to increase 20% over last year to $1.68 billion, up from December’s forecast of $1.3 billion, according to a study by digital research group EMarketer.

“That’s primarily due to the strong performance of Facebook and somewhat due to the fact that we started adding Twitter to our analysis,” said Debra Aho Williamson, an analyst.

The study, conducted every six months, also measures sites such as MySpace, LinkedIn and Classmates.com as well as popular sites in China, Japan and Russia for worldwide figures.

Half of that $1.68 billion spent by U.S. advertisers will go to Facebook, according to the study. By 2011, advertisers will spend $1.06 billion on the San Francisco company — a 112% increase from 2009.