Thursday, February 2, 2012
Facebook Ads Becoming (A Little) More Valuable; Mobile May Be Next
In the S-1 filing for Facebook's IPO, the company offers a little more insight into its advertising business, which it describes as "the substantial majority" of its revenue (and that's an understatement). In 2009, advertising accounted for 98 percent of Facebook's revenue. The number declined to 95 percent in 2010 and 85 percent last year, thanks largely to the growth of revenue from payments. Advertising revenue is climbing, though that growth has slowed ? it grew 69 percent in 2011, to $3.2 billion, but it grew 145 percent in 2010. What's driving the growth? Facebook's increasing traffic, which led to a 42 percent increase in ads served. Plus, the company says that the average price advertisers pay per ad increased by 18 percent, thanks to improved ad targeting capabilities and more prominent ad placements.