Facebook reaches a milestone of one million active advertisers
Facebook revealed on Tuesday that over one million active advertisers have made use of the platform in the past month – an important milestone for a company hoping to rekindle revenue growth.
The majority of advertisers are owners of small businesses who have embraced social media marketing, choosing the world’s largest social networking platform to reach out to both existing and potential customers.
Executives of the firm are hoping to gain further small advertisers. 16 million local businesses, which range from handmade jewellery sellers to vintage clothing boutiques, have set up free pages on the site.
Whilst calculating precisely how much money small businesses spend on advertising online is difficult, firms in the US spent in excess of $32 billion on advertising in total during 2012, according to the market research company eMarketer.
The director for small business at Facebook, Dan Levy, claims that many small business owners start off as personal users on the site before setting up a page for their business and eventually migrating to become paid advertisers. He also rebuffed any rumours that Facebook plan to start charging businesses for hosting their pages.
85% of Facebook’s revenue comes from advertising – from small businesses up to the world’s biggest advertising agencies and brands. Following a steep slowdown last year, the social networking giant is trying to spark further ad growth.
During the last quarter of the year, Facebook reported revenues in excess of 46 billion. Its revenues from advertising rose 43%, the quickest growth rate since the final quarter of 2011.
The firm declined to reveal how much ad revenue was generated from small businesses, and would not indicate exactly how long it took in order to reach the milestone of one million.
Facebook recently introduced a number of initiatives in order to boost growth (including a major overhaul of the newsfeed). The process in which advertisers purchase adverts is now much simpler than before – something which attracts small business owners which are “critical” to the success of the site, according to Brian Wieser, an analyst from Pivotal Research Group.
His also claims that launching new advertising products targeted at small businesses last year has significantly accelerated their revenue growth.
Kim Caulfield is one user who has benefitted from small business advertising on the site. A small business owner in California, Kim started using Facebook’s advertising services in an attempt to gain more customers for her horse tail hair jewellery company, Tail Spin.
She now spends roughly $255 every day on Facebook advertisements which are targeted at horse enthusiasts – providing her with a potential outreach of over five million users.
It’s thought that approximately half of small business owners use Facebook pages as a means of promoting their business, although just 16% purchase ads on the site, according to BIA Kelsey, a research company which specialises in local.