Facebook’s Sponsors become ‘Pages,’ and it works

As promised from my last post, “November ’09 Facebook Data and Gender,” here are some thoughts on the November Facebook statistics in terms of marketing.  One of the first articles I wrote for Marketing Conversation was titled, “Facebook is richer in concept than cash” and discussed a December 2008 CNN video that noted Facebook’s unimpressive revenue from the site’s advertisements.  The video’s caption notes: “The Palo Alto-based social networking site hasn’t figured out how to convert popularity into profits.”

That could not be further from the truth as 2009 comes to a close.   Now according to Inside Facebook, the ads featured on Facebook are actually pulling in money—a lot of money.

In Depth: Discussing Facebook’s Advertising Future with VP of Global Sales Mike Murphy:

“Facebook has grown total revenues to around $550 million this year, with about 90% of its revenues in our estimation coming from advertising.”

It took some time for Facebook ads to prove their value to the social network.  This is due to the perfect combination of smart marketing from the Facebook company and the shift in user demographic.

The kind of advertisements that CNN cited and that I wrote about are those annoying banners and brand graphics that can clutter your page.  Although these still exist on the right side of your Facebook profile (that often ask me if I need to lose stubborn belly fat—hm a sign?) the banner-type ads are slowly diminishing.  The way the Facebook crew made this happen is actually pretty clever and also pretty obvious.

Vice President of Global Sales for Facebook Mike Murphy explainedthe simple solution to making ads more welcome to social networkers: “We realized quickly that the better we did to display advertising as part of our product, the better we delivered value to our users and advertisers. So we’ve been really focused on developing ad units that include social context so that they feel more like the rest of the content on Facebook.”

This “developing of ad units that include social context” is simply Facebook Pages. I’m sure we have all been ‘fans’ at one time or another.  Murphy also said, “what has become Pages today was actually originally sponsored groups.”

The concept of Facebook–creating a profile to connect with others–was applied to the way the site displays its sponsored brands.  The Pages allow brands to interact with customers in the massive Facebook community.

Another reason for the increase in ad revenue is because Facebook isn’t just for kids.  Inside Facebook cites that 48% of Facebook users are over the age of 35, which is pretty impressive for a social network synonymous with college life.  In this tough economy not many of us have much money in the first place, but if I were to look for someone with money I definitely would not begin with my 21-year-old peers.  Facebook now hosts a high percentage of people (age 35+) who are likely to have an established career with steady income.  The social site is therefore becoming a hot spot for big brands to push products and market services using a friendly approach via Pages.

Of course we at Abraham Harrison are cool enough to have a Facebook page, become a fan!

So next time you log in, check out your favorite brand-Pages and know that they contribute a hefty amount to the maintenance of the site that has become an addiction for so many .

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