The Facebook money machine – $1.5bn this year

By October 18, 2010Advertising, Facebook

Monday Note has a post up today with some good information about Facebook. 

I put the first piece of news in the title, which is that they predict Facebook’s revenues will be $1.5bn this year – that is $3 per registered user, a metric that compares well with the handful of comparative data points I can think of from other social networks I know.

Secondly, this table of the most popular fan pages is interesting, both for the absolute numbers of fans some of these brands have accumulated and for the big difference between first and fifteenth places.

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By now some of you are probably listening to a voice inside your head which is asking “surely the level of interaction is more important than the gross numbers of fans?” – and it is.  Monday Note has some interesting data on that as well – and the headline is that there is huge variation between the best and worst performers as measured by monthly interactions per thousand fans.  Looking at a same sector comparison, H&M is doing four times better with its 4.3m fans than Gap is with its 0.75m fans (and that ignores Victoria Secret whose product is perhaps uniquely suited to driving engagement).

These big disparities are a reminder that despite Facebook’s reputed $1.5bn revenues this market is in its infancy and as a result Facebook marketing is still more of an art than a science, and is practiced with widely varying amounts of success.

Finally, if you have ever wondered what information Facebook offers to advertisers so they can target their ads, then read this (again from Monday Note):

Facebook makes possible to combine precise parameters, ranging from location to company name and the precise timing of an ad with a high degree of precision (find the women above 40 who work for IBM, in northern New York state and deliver an ad every Friday between 18:00 and 22:00, for instance).

Advertisers buy targeted ads on Facebook through self serve system that apparently accounts for half of Facebook’s revenue.

The other news about Facebook today is that they have a privacy breach that exposes user information.  If these claims are substantiated and can’t be fixed then Facebook’s targeted advertising will be one of the first services in the firing line.

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