Case Study Research: Design & Methods: Applied Social Research Methods Series

Facebook Continues to Dominate Digital Advertising Industry

In this era of Social Media where virtually everyone with access to the internet is connected with each other, marketers and advertisers are leaning more and more into digital means of advertising over traditional methods. Focusing mostly on the USA, the digital ad revenue in the marketing industry increased by more than 20% only within the last year, which is substantially large when compared to other methods of advertising. Among the online top players running head to head in popularity, it is now a vast competition as to which online giant gets the most of the ever-increasing growth of digital ads.

According to the estimates, this growth is divided mostly between Google and Facebook.

How Facebook Marketing Works?

Facebook is currently the most popular and the most populated social network online. With over 2 Billion active Facebook users, it is one of the most effective tools of advertising for any niche. Statistically, with such a large audience, it is likely that the ideal customers of any industry are active on Facebook. The updated Facebook advertising algorithms allow you to target your audience among this vast number of uses with a pinpoint accuracy.

Facebook is constantly working on ways to monetize their large number of active users by allowing the companies to advertise in a variety of ways. These ways are smartly blended into the Facebook experience, so as not to come up too spam-like or disrupting their personal interactions to which the users initially use Facebook for. From business pages, groups and direct ads, there are many ways their advertising methods can be utilized. Facebook is smart in making their ads fairly affordable when compared to other social media networks since it helps many small business owners to use Facebook as their primary advertising and marketing method.

Facebook’s Business Model and Advertising Revenue

Owing to the size of their audience, user-friendliness and many innovative ways in which marketers can advertise in the platform, Facebook has a substantially large ad revenue as you can imagine. According to the most recent reports, the tech giant is making over 26 Billion just from their business ads per year. The way Facebook’s business model is created, their advertisements are their biggest revenue creator since they operate under “It’s free and always will be” slogan for their users.

According to a report in 2015, 95% of their total revenues (Over 17 Billion) were generated through advertisements globally. There are some paid services especially targeting corporate businesses, but it generates less than 5% of revenue for the company.

Speaking of the average revenue per user, since their scope of reach is the best marketing tool that they have, by 2015, it passed $3 globally.

With the great penetration of smartphones to the everyday lives of the people, the usage of Facebook increased drastically, thus contributing largely to their advertising revenue. Mobile Facebook users are now reported to be the highest revenue markets for the company, with 77% of ad revenue coming from them.

Facebook Marketing Methods

While Facebook marketing seems one of the easiest ways of reaching a huge targeted audience, to get a good conversion rate it is important companies treat it with the same importance as other regular marketing methods. For an example, it is important that a proper market research is carried about prior to the ad campaign. There are many demographics that you can target through a Facebook campaign. Location, gender, age, interests, income, and education are some of them.

Once these demographics are researched according to your niche, the advertisements should have attractive visual content which appeals to those particular demographics. Social Media networks have continued to prove that visual, colorful and attractive content with images perform better than text content when it comes to user engagement. Furthermore, recently all the social networks are pushing more video content onto their platforms due to the higher engagement rates that they get. Humans are visual creatures who are partial to audiovisual content, and those media advertisements are more likely to make a stronger impact in their minds when compared to the text content.

Strategic scheduling and posting of these ads also boost up the success of Facebook marketing campaigns. If the ads are location specific, it is important to schedule them around a time where the locals in that area are active on Facebook.

This information is to be acquired through proper research as mentioned above.

Why is Facebook Advertising Successful?

If you are still wondering whether to allocate your marketing budget for Facebook Marketing, let us give you a few more reasons as to why. Apart from the sheer breadth of the platform which encompasses a variety of demographics which surely contain your potential customers, Facebook also offers a sense of personal intimacy that other methods of advertisements cannot usually reach. As we all know, Facebook users spend a large amount of time on the platform even if it’s glancing at the newsfeed for a few minutes every hour. This gives you a larger chance of being seen without making the users feel like it is an advertisement since you will be among the posts of their friends and interests that they willingly follow.

Affordability is another key factor in Facebook marketing. In traditional marketing methods, you will likely spend hundreds of dollars only to put out your message to a wide audience which is not very focused. Facebook not only allows you to specifically target your audience but also with their ad payment mode, Facebook charges you only when it delivers the reach it promises. You can see the engagements real time and see how many conversions you get, rather than shooting blindly via traditional marketing methods and hoping for the best.

Due to the very successful marketing model, Facebook’s advertising revenue continues to grow, attracting more and more small, mid-level and corporate businesses to spend large amounts of money for Facebook marketing. With their recent acquiring of Instagram, the revenue levels have gone even higher due to the user-friendliness of easily advertising in two platforms – hence two kinds of audiences. With many users signing up every single day, Facebook is here to stay, and so does Facebook marketing.

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