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Facebook Advertising by the Numbers

Facebook’s IPO this Friday is exciting for marketers and advertisers, who will enjoy more transparency around Facebook’s ad business. Media outlets across the world are buzzing with news of the Facebook IPO because of its enormity and the impact it will have in many different sectors; it is slated to be the largest technology IPO of all time.

Facebook has already changed marketing and advertising practices with their unprecedented targeting capacities, reach, and engagement levels. Facebook has placed social at the top of advertiser agendas and strategies. We too have been caught up in the IPO hype, and decided to dive into Facebook’s S-1 filing to highlight key points of interest for advertisers and marketers.

Ad Revenue

  • Facebook’s posted ad revenues of $3.15B for 2011, and $872M in the most recent quarter.
  • In the US and Canada Facebook made $9.51 in ad revenue per user in 2011.
  • eMarketer predicts Facebook’s ad revenue will reach $5B this year and $7.6B by 2014.
  • Facebook Ads that include a social element, such as the instance of a friend Liking a page, enjoy greater ad recall than those without social validity.

Reach, Engagement & Purchase Affinity

  • Facebook’s S-1 filing in February initially reported 845M monthly active users. Since then, monthly active users have increased to 901M (mid-April). This speaks to the extraordinary number of people that advertisers and marketers can reach on the social network, and the 7% increase in 3 months further shows Facebook’s sustainability.
  • As for the amount of time these users are spending on the social network, in December 2011, there were 489M daily active users; a total of 9.7B minutes a day is spent on Facebook.
  • On mobile, Facebook enjoyed 424 active users in December 2011. The company plans to increase advertising efforts like Sponsored Stories on their mobile app and browser experience; and many believe the company will revolutionize location-based advertising.
  • Facebook fans and their friends spend 8% more per purchase event and produce 11% more transactions than the average Internet user.

If the high level numbers above still leave you curious about the impact of Facebook’s advertising and marketing ecosystem, check out the individual success studies below and our resources page. Last month we attended a Facebook developer conference at their headquarters, where they offered a sleeve of flashcards with case study results from a variety of sectors. Here are three that stood out to us in particular:

PF Chang’s

For restaurant P.F. Chang’s birthday they launched a Facebook campaign which drove over 50,000 customers (40% of them new) into its restaurants. P.F Chang’s launched a 3-week Facebook campaign targeted at people in urban areas where P.F Chang’s had several restaurants; the total reach was 9.1M people. Facebook Ads and Sponsored Stories coupled with PR, email, website announcements, and other social platform use helped P.F Changs drive current and new fans to their Facebook Page. Here they claimed a coupon for a free order of lettuce wraps. The restaurant’s fan page doubled to 420,000 fans and the company reported more than a 3,000% increase in page engagement.

Diageo

Liquor company, Diageo wanted to drive awareness for their five main brands,  Captain Morgan, Baileys, Jose Cuervo, Smirnoff, and Crown Royal. Through Premium Ads targeted to those of the legal drinking age, Diageo drove Facebook Likes to the 5 liquors’ fan pages, where the company offered early access to product news and recipes. Diageo saw a 20% increase in fans across these five brands, and reports generating a 5X ROI on the campaign’s media investment.

Bud Light

During the Super Bowl Bud Light took over a hotel in Indianapolis. The Bud Light Hotel was complete with branded towels and complimentary shampoos. Guests were also given RFID  wristbands which enabled themto take pictures at kiosks in the hotel, tag themselves, and share them on their Facebook News Feeds. Bud Light used sponsored stories to distribute guests of the hotel’s status updates and photos. The Bud Light Hotel offline to online event increased their fan page engagement by over 200%. There were over 2,000 photo uploads from the event.

What other numbers and case studies excite you about Facebook advertising?

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