Tuesday, September 23, 2014

Facebook ad revenue: more money for less time

eMarketers Facebook Digital Ad Dollars
A lot of people spend a lot of time on Facebook. That’s a given. But when eMarketer broke down the numbers, they found something very interesting. When you compare time spent on site and ad dollars as a percentage of the whole, it simply doesn’t add up.

Looking at all digital activity in a day, Facebook users spend about 21 minutes on the site (that’s a lot!) which is 6% of all digital time. (That’s not so much.) Let’s be clear, those numbers are for the entire population, about half of which doesn’t go on Facebook at all. When you look at just adult Facebook users, time on site jumps to 39 minutes – feels longer. . . .
Getting back to ad spend. . . as you can see from this chart there is a norm. Usually, percent of time spent goes far beyond percentage of digital spend. People spend 15.9% of their digital time watching video but advertisers only allocated 11.7% of their digital ad budget to video.

But then there’s Facebook with the bars going in the opposite direction. 6% time spent vs 9.7% spent on ad dollars. That’s quite a shift, especially if you compare it to digital radio where the spend isn’t even close to the time spent.
Why are advertisers bending the budget for Facebook? eMarketer says Facebook is a better bet than other options because the users are heavily engaged and focused on the page. It’s easy to miss an ad when you’re listening and not looking at a song on Pandora. It’s easy to skip an ad at the start of a YouTube video. But it’s hard to miss an ad that’s disguised as a Facebook post in your feed, particularly on mobile where a single post fills the screen.
The way we use Facebook isn’t the only reason spend exceeds time. The main reason, according to me and eMarketer, is the hype. Facebook has convinced advertisers that their targeting will deliver the best ROI of any digital site. They’ve also convinced the world that everyone is on Facebook and if you’re not, you’re not cool. No one wants to feel left out. So marketers flock to Facebook, first to build free fan pages and when that doesn’t work, they start throwing dollars on the path hoping people will follow.
I say “marketers” as if it’s them, not me but I’ve done it. I’ve succumbed to the allure of tightly targeted advertising and the potential to have more followers on my page. Did it work? Depends on what you mean by work? I used Facebook advertising a few times and the impressions are there, the traffic is there, but the conversions weren’t what I hoped for. But I’m small potatoes working with a small budget. With more money and time, Facebook ads will convert. Will they convert enough to justify the expense? Yes for some, no for others. Sorry, there’s no exact data on this.
Facebook marketing must be working for someone because advertisers spent $2.7 billion in the second quarter of 2014.
Is Facebook advertising working for you?

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