With over 714 million users, Facebook is the most popular social network. When the site started offering space for marketers to promote their products, many internet marketing companies expected a decline in ad prices with the rise in inventory. But Facebook has managed to sustain ad rates in spite of a growing inventory.
Self serve ads account for a majority of sales on the site. An automated auction system is used to sell the ads. Facebook was recently redesigned to increase the number of available advertising spots on many of its pages from three to five. Now advertisers can add ads below photos as well. Since the completion of this redesign in March, self-serve Facebook ad rates have remained unchanged.
According to estimates by eMarketer, a New York based internet research firm, Facebook is likely to increase its global internet ad revenue to $4.05 billion this year, more than doubling the figure. Web users spend more time on Facebook than on any other website, which makes it an advertising hotspot for marketers.
Along with efforts to offer marketers new and effective ways of marketing their products on the platform and staying ahead of competitors like Twitter and Google, the company also needs to ensure that users are not troubled by too many promotions. According to David Fischer, advertising and global operations vice president at Facebook, the company is constantly testing new ad formats so that both advertisers and users get more value.
The key takeaway here is , “Don’t Annoy Your Audience.” Google has managed to walk the tightrope between user experience and ad revenue without ticking people off (well maybe not SEOs:). Facebook is learning to do the same.