Facebook’s 2011 advertising revenues were $3.1 billion, up 69 percent from the year before, according to the Menlo Park, CA-based firm’s S-1 filing today for its initial public offering. Facebook, which has increased its ad units per page from four to seven in the last two years, appears to have benefited greatly from those particular moves. According to the filing, the primary reason for the jump in ad revenue was a 42 percent lift in the number of ads delivered, as well as an 18 percent hike in the average price per ad delivered.
Total revenue for last year was $3.7 billion, Facebook’s filing said, representing a near doubling of 2010’s revenue of $1.97 billion. Games developer Zynga helped generate 12 percent of Facebook’s revenues last year.
The much-anticipated financial disclosure by Facebook finally gave industry observers a look into the digital giant’s financial and operational life. At the end of 2011, according to the filing, the company had 3,200 employees – a doubling of its staff in one year. It took on investments from financiers of roughly $1.2 billion last year, $781 million in 2010, and $243 million the year before.
The filing says there are 845 million Facebook users worldwide, with 483 million active daily. According to the S-1, Faceook usage is fairly evenly distributed across the globe.
|Facebook Annual Revenue|
|Payments, other fees||13||106||557|
The rise of CEO Mark Zuckerberg’s company – which turns eight years old on Saturday – has been nothing short of staggering. For instance, only two years ago, Facebook was attempting to reach 500 million users. Now, according to the filing, it has 400 million mobile users alone.
With its climb has come a dedicated marketplace of Facebook ads vendors – firms such as Buddy Media, Vitrue, Context Optional, and Syncapse, as well as game developers like Zynga and Playfish.
Rebecca Lieb, digital advertising analyst for Altimeter, commented that “the enormous ecosystem of companies in the ‘Facebook economy’ agencies, technology providers, and API-dependent plays such as Zynga, indicate that more than Facebook is threatened if Facebook were to fail.”
The No. 1 threat to Facebook is Google, which has topped 90 million users for its young Google+ social networking competitor. As James Lenz, a Rice University advertising professor, suggests, a lot can change in the social space in a short amount of time.
He said, “Facebook does [have] several challenges including regulatory issues, privacy concerns, competing with the likes of Google and Apple, and trying to perpetually monetize its consumer base while at the same time not alienating them. In the end, Facebook will more than likely still be standing.”
Catherine Tucker, an MIT marketing professor, weighed in on what Facebook’s IPO means to companies that lean on digital to sell products. “I think it reflects the power of social media to inspire customers to be active on the platform,” she said, “and the potential for social advertising to generate huge revenues from these consumers.”
With 80% of brands believing they provide good social customer service but only 8% of customers agreeing, it is easy to see there is a disparity between perception and reality in this space.
President Trump's digital savvy isn't limited to social media. As it turns out, the Trump Organization owns thousands of domain names, possibly even more than 10,000.
Social media has developed into an effective component of digital strategy, but measuring its performance is still a challenge. How will analytics affect social media in 2017?
I didn’t vote for him last November. There was no way this registered Democrat from the blue state of Massachusetts would check that box. But I have to give him props for his tweets.