19/06/2013
Facebook just hit 1 million advertisers, a milestone signaling that it has become a mainstream advertising channel for small and medium-sized businesses.
OK, so maybe cool isn’t the right word, but it’s hard to resist a good line from The Social Network movie. The social network announced the figure in a blog post today thanking its advertisers. To be specific, there are 1 million currently active advertisers, those that have advertised in the last 28 days.
A couple more telling stats: Facebook claims more than 2 billion connections between members and local businesses, with 70% of users in North America connected to a local business. On average, local business pages produce 645 million views and 13 million comments (not always positive, it must be said).
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All this suggests that small and medium-sized businesses could account for the bulk of revenue growth this year, Pivotal Research Group analyst Brian Wieser wrote in a note to clients. “While some observers might read this data as implying weakness in growth from other segments of advertisers, we view this very positively, as it speaks to the predictability and durability of the company’s revenue growth,” he wrote.
Google GOOG +1.66%, the king of online advertising, still has many more advertisers, which isn’t a surprise since search ads traditionally have been particularly appealing to small businesses. The search giant reached 1 million advertisers in 2007, but it hasn’t been as forthcoming about the number since then. Some estimates put the current number at more than 2.5 million.
It’s not entirely clear whether Facebook eventually will catch up to Google. Mark Zuckerberg‘s company generally has been more focused on reaching big brand advertisers. That’s partly because its site is a little more like Television 2.0 than Search 2.0, because people hang out there to communicate with friends more than to find stuff to buy.
Plus, it’s worth mentioning that the bulk of advertising dollars in traditional channels like TV and print still go toward image ads intended to boost awareness of brands and consideration to buy, more than to elicit a click to buy something immediately. So it makes sense for Facebook to go after bigger territory than the digital ad market alone.
Still, a base of a million advertisers indicates that Facebook has been successful at attracting local businesses that like the ability to reach very specific audiences of people on Facebook who have self-identified where they live. They don’t have to guess people’s location from fancy algorithms or tempt privacy blowups by tapping into GPS data. And Facebook’s ad exchange allows advertisers to overlay their own targeting data atop Facebook’s demographic and interest data.
Facebook continues to push for more small businesses to get on board. Today it also unveiled a site that features small-business success stories and tips for advertising more effectively, plus a link where businesses can share their own stories. These days, as Facebook tries to supercharge revenue growth to please wary investors, it will take revenues wherever it can find them
