Here’s the reality. You can’t browse Facebook without seeing an ad. Everywhere you go, all you see are ads plastered on the sides of the page, or even in News Feeds. Why? Because companies pay Mark Zuckerberg to advertise, so more ads equal more money. You might think that putting up ads in Facebook is a win-win situation, since both the company and Facebook benefits from them. The answer is both yes and no.
On one hand, the brands that opt to advertise in Facebook have increased their fan base, which increases their popularity, and in turn their sales. But advertising in this social network is not cheap, as it already rose by 74% in cost-per-click rates.
Efficiency Frontier reported that cost-per-click rose by 22% in the second quarter of 2011.
“Even if CPCs increase at 20% per quarter for the remainder of the year, this will still result in an 80% growth in a year,” says the report. “This could reasonably equate into a doubling of Facebook’s revenue from marketplace ads.”
Brands that have not thought of advertising in Facebook are urged to think about this strategy, as ad cost will become higher as time goes by. But this doesn’t necessarily mean that you have to do it now just because you’re thinking about the future price increase. Advertising on Facebook should be well-thought out, and should not be rushed. You should be thinking about how this could help you’re business. And who knows? Maybe Google+ will surprise everyone by opening it up for ads at a cheaper rate.
Facebook’s ad network has been a touchy topic on many fronts, from their effectiveness to their access to network demographics. And as with most of Facebook’s other features, you can expect regular changes, and regulation enforcement within its system, at times without just cause. The social network recently banned two ad campaigns for advertising their Google+ accounts, looking for people to add to their Circle. Guys, seriously? If you have to put up an ad to get friends on a social network, you really need to get out more anyway.