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Update: That word million doesn't seem right, in order for this company to be the third largest advertiser on Facebook, that's got to be a typo. It's possible t

Update: That word million doesn't seem right, in order for this company to be the third largest advertiser on Facebook, that's got to be a typo. It's possible that AdAge mistyped this, that's the simplest explanation. I've asked the reporter for clarification and apologize for not getting it prior. Thanks as always to our eagle eyed commenters. They are noting in the comments that 1.75 million ad impressions would probably only cost the advertiser a few hundred dollars, which would make it difficult for that to be the third largest advertiser considering advertising brought in a $1.86billion. I don't know anything about the cost of advertising, but do those numbers seem right?

metageek 16y ago
Maybe the long tail really does drop off that fast. According to the "Facebook is a Ponzi scheme" article ljlolel posted [1], most Facebook advertisers experiment for a while, then give up; that would make for a long tail and a steep curve. [1] http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme
- harshpotatoes 16y ago
  I've been thinking about it, and I think that another possibility is that there is no drop off, just a very flat curve with all companies spending a very similar but low amount, meaning the only reason facebook earns money from advertising is through the high volume of companies advertising on facebook. This makes sense in my mind, because I have a hard time believing google spends less than this unheard of company. But, your explanation seems equally likely at the moment...
jbenz 16y ago
I stopped advertising on Facebook a couple of years ago because the ROI just wasn't there, but using Google's Display Network I can easily get to 1.75 million impressions pretty quickly with a bid of $0.50 CPM (cost per thousand impressions). That means $875 could buy 1.75 million impressions. Facebook might be more expensive, but even if it's $1 per thousand impressions, that's only $1,750. I think the 1.75 million number in the article is incorrect. Ultimately, it comes down to this: people aren't on Facebook to spend money. They're on there to see what they're friends are doing and communicate. If a friend posts a cool link in their feed, sure you'll get a few visitors following that link. But if the link is in an ad to the right, people just aren't interested. This differs from certain aspects of the Google Display Network. For example, if you're on a Transformers fansite, you're probably there to geek out about anything Transformers. In that scenario, if you see a banner ad with a really cool Transformer's T-Shirt displayed on it, the ad almost becomes part of the content at that point. You're much more likely to click on it and actually be interested to see where it leads. (As opposed to accidental clicks, which makes up a huge percentage of cost).

metageek 16y ago

Maybe the long tail really does drop off that fast. According to the "Facebook is a Ponzi scheme" article ljlolel posted [1], most Facebook advertisers experiment for a while, then give up; that would make for a long tail and a steep curve. [1] http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme http://www.jperla.com/blog/post/facebook-is-a-ponzi-scheme

harshpotatoes 16y ago
I've been thinking about it, and I think that another possibility is that there is no drop off, just a very flat curve with all companies spending a very similar but low amount, meaning the only reason facebook earns money from advertising is through the high volume of companies advertising on facebook. This makes sense in my mind, because I have a hard time believing google spends less than this unheard of company. But, your explanation seems equally likely at the moment...

jbenz 16y ago

I stopped advertising on Facebook a couple of years ago because the ROI just wasn't there, but using Google's Display Network I can easily get to 1.75 million impressions pretty quickly with a bid of $0.50 CPM (cost per thousand impressions). That means $875 could buy 1.75 million impressions. Facebook might be more expensive, but even if it's $1 per thousand impressions, that's only $1,750. I think the 1.75 million number in the article is incorrect. Ultimately, it comes down to this: people aren't on Facebook to spend money. They're on there to see what they're friends are doing and communicate. If a friend posts a cool link in their feed, sure you'll get a few visitors following that link. But if the link is in an ad to the right, people just aren't interested. This differs from certain aspects of the Google Display Network. For example, if you're on a Transformers fansite, you're probably there to geek out about anything Transformers. In that scenario, if you see a banner ad with a really cool Transformer's T-Shirt displayed on it, the ad almost becomes part of the content at that point. You're much more likely to click on it and actually be interested to see where it leads. (As opposed to accidental clicks, which makes up a huge percentage of cost).