Facebook Ad Prices Up 92% from Last Year (7)
In the battle for advertising market share, Facebook's army is advancing on multiple fronts.
Wall Street Journal
Just how far was shown by the social network's fourth-quarter results after the market close on Wednesday. These sparked a 14.1% jump in the company's shares Thursday, adding about $17 billion to its market value. The two salient points exciting investors: Facebook has tremendous pricing power among advertisers, and it isn't about to run out of new ad slots to sell them.
Facebook trades at 49.3 times 2014 earnings estimates, compared with 21.8 times for Google, GOOG +2.57% which has more than double the mobile-ad market share.
That premium is based on the notion that Facebook is rapidly closing the gap with Google. The social network accounted for 18.44% of the world-wide mobile ad market in 2013, up from 5.35% in 2012, eMarketer estimates. That compares with a climb to 53.17% from 52.35% for Google.
Facebook's performance provided reassurance in several ways. Mobile-ad revenue as a percentage of overall ad revenue climbed to 53%, from 49% the prior quarter and 23% a year earlier. This was due to the ongoing shift of ad dollars to mobile away from more traditional media and Facebook's ability to capture a bigger slice of the fast-growing pie.
Meanwhile, Facebook's pricing power, one point cheering investors, was far stronger than expected. That reflects the effectiveness of its mobile ads, which are mixed into a stream of user content. So far, this is one of the few mobile formats advertisers have shown a willingness to pay for.
Underscoring this, the improvement came as total ad impressions at Facebook fell 8% year over year in the fourth quarter. That encompassed both impressions for desktop and mobile. While the latter is growing faster, it has less room for ads. But the average effective price per ad at Facebook was up a whopping 92% versus the prior year.
Importantly, Facebook also found a way to put to rest concerns about its ability to continuously generate new real estate for ads, the second reason investors were so exuberant. In the third quarter, the ability to grow ad slots became a worry after Facebook said it would cap the number of ads as a percentage of posts in users' news feeds at about 5%.
IMO, if FB ever lets website publishers show FB ad slots, it will soon be game over. Google Display is cool but a massive transition in the webmaster world is not out of the question. Ads can be targeted to users if logged in (who logs out of their FB account?) and in larger formats for desktop users too...
I'm not sure how they define "price per ad". It's definitely not the CPC that's gone up 92%. FB has a benchmark of $ they want to make on every page. By introducing more ad slots they are not making more $ unless they also increase their PPP (price per pageview), which they have done.
Also, taking most tits out of ads has allowed non-dating-affiliate businesses to get cheaper clicks and compete better.
Haha interesting reading this thread after reading this one http://stmforum.com/forum/showthread...cebook-in-2015
Is that Private FB group off the ground? There's change in the works over there but I won't post it publicly.
Very soon! The tech is in place, we're just sorting out some last-minute details.
Originally Posted by grandtheftpixel
For stuff they are "cracking down on" (flavour of the month/quarter), we can set up a thread in the private forum, yes..
As for platform changes that are handy to know, this page has always hinted at more than it should: https://developers.facebook.com/roadmap
Juicy info sometimes.
Originally Posted by redrummr
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