Facebook Rules 2011

by YC Ng on February 19, 2011

When Facebook first started becoming available on the worldwide web, it was seen as just a tool to share news and play games among friends and family. But then it grew bigger, with more games and quickly gained popularity. In 2010, it has gone to the point of being the biggest thing, taking over Google’s position as most visited website. Then the advertisements start pouring in.

At first, even though advertisers paid low CPCs (Cost Per Click) or CPMs (Cost Per Thousand Impressions), but it generated very low conversion rates. Now, Facebook showed some impressive improvements.

Sample Facebook ads

As the year marched towards the second half of 2010, things start to be different. A comparison of advertisements run on Facebook, Google, Yahoo and Bing saw an increasing force of Facebook as a huge media. The budget for Facebook ads went up too, but it delivered. CTRs (Click Through Rate) on Facebook may be still very low percentage, ranging between 0.2% to 0.04%, while search engines yield between 1% to 5% or more. Most advertisers see the significant increase of their ad impressions. However, we also find the CPC has been increasing as well, compared with a year ago.

Google has a problem, because performance is often not reeled towards brand awareness or driving visitors to the ultimate result. However, Facebook seems to have grown very well in its inventory, and this result is worldwide and is stronger in APAC countries.

Some companies are opting to have Facebook in their advertising campaigns media mix for a long time, including giants like Intel Corp. Facebook had changed the mindset of advertisers and now they are ready to pour in the bulk of money into advertising on Facebook instead.

eMarketer predicts that advertising spend on facebook will hit over $4 billion worldwide in 2011. That’s more than double the total spent in 2010!

Facebook Ad Revenues 2009-2012

It is then no wonder that Facebook surpasses Google in many ways by the end of year 2010. Facebook will be King for the year 2011 onwards, and will remain as the Ruler of the Internet world unless something else comes up better than it.

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