Report: 74% of Facebook Ad Revenues Comes from Local Advertisers
With Facebook planning to do over $500 million in total revenues this year, one advertising research firm says the bulk of the company’s advertising revenues are coming from local advertisers.
Borrell Associates says that of the $310 million it estimates in total advertising revenue for Facebook in 2009, nearly $230 million of that, or 74%, will come from local businesses targeting Facebook users based on their location. By comparison, Borrell estimates that only 27% of MySpace’s 2009 revenues will come from from local advertisers ($133 million out of total ad revenues of $502 million).
We spoke with Kip Cassino, Borrell’s VP of Research, this morning, and he said the firm reached these numbers by comparing known ad spending numbers by businesses it tracks, and comparing them to published estimated values for Facebook ad revenue.
Overall, Borrell estimates 20% of all social network ad spend will be local this year. That would mean Facebook is winning the local advertising battle amongst US social networks by a long shot. No other social network the company makes estimates for comes in about 15% of total ad revenues coming from local.
If true, that would obviously be a great sign for Facebook Ads. If Facebook can prove to local advertisers that it can generate leads (and demand) efficiently at the local level, it should continue to grow its share of the $150 billion local advertising market in the US as more advertisers come on board and compare Facebook to their existing local marketing channels.
July 20th, 2009 at 12:47 pm
they have to let people buy engagement ads with homepage placements through the self served ads system just like Google!
facebook loosing tons of money because they charge expensive rates for those ads which 50% of the users never see because they live outside the US.
July 20th, 2009 at 2:48 pm
We’ve tried a variety of local campaigns, facebook ad traffic is worthless unless your in dating or mmo niches. They really need better ad targeting controls.
Having ads display along side games is silly for most offers as people simply click on the ads to kill time while they wait for the game to cycle.
Terrible conversion. (and no, this isn’t our first BBQ)
July 20th, 2009 at 2:53 pm
The 74% number seems almost impossible given the increased use of Social Ads by affiliate marketers for the first two quarters of ’09. Nearly all affiliate offers are at the national level and most of the marketers work with substantial budgets through advertisers who can accept unlimited volume.
Would be curious to learn more about their methodology on this one. I rarely see more than 10% to 15% localized (that i’m aware of) ads (http://www.facebook.com/ads/adboard/) through the profiles I work with.
July 20th, 2009 at 6:04 pm
[...] 74% of that revenue derived from local businesses using Facebook to target users geographically. Click here for more information but Borrell is quick to note that despite the striking focus on local advertising on Facebook that [...]
July 20th, 2009 at 8:26 pm
In case local developers are more, they should expand city targeting to more countries. Instead of extra features like people using app etc., they should give city/state targeting to more and more countries.
In India, still you cant target a city. I would have spent some money on advertising my product. Now that i cant target city, i feel money is not worth it.
July 20th, 2009 at 11:02 pm
[...] Local Ads Moving to Social Networks & Report: 74% of Facebook Ad Revenues Comes from Local Advertisers // Photo Credits: © Casas-Rodríguez Collection, 2009. Some rights reserved. Creative Commons [...]
July 21st, 2009 at 4:53 am
[...] Analyst says 74% of Facebook revenue is from local advertisers [Inside Facebook] [...]
July 21st, 2009 at 5:54 am
With the dramatic increase in older users, advertising performance should increase. The younger (original) Facebook demographic is much more oblivious to ads, or if they see the ads, they intentionally avoid looking.
http://domusinc.blogspotcom
July 25th, 2009 at 6:17 pm
[...] Report: 74% of Facebook Ad Revenues from Local Advertisers (insidefacebook.com) [...]
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