Special Report – Facebook: Secret Weapon to Combat Falling Ad Rates

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Facebook was in the news thanks to the Zynga IPO the company which provides the famous Ville games on the social media. It is back again this time but on its own merit.

The biggest social network Facebook, said advertising rates have held up even after it added new ways for marketers to promote products, allaying concern that prices would decline as inventory surged.

Self serve ads

We have hundreds of thousands of advertisers around the world — that continues to grow, said David Fischer, vice president, advertising and global operations. Without disclosing rates, he said, We continue to feel good about where we are.

The rates which we are talking about here are the rates for the self serve ads. These adds are sold through an automated auction system and account for most of the sales. It has been disclosed by Facebook that the numbers have remained unchanged from Marc when the company completed a redesign to add promotions under photos and increase the number of spots on some pages to as many as five from three, Facebook said.

Unprecedented competition is seen in the social networking sties. CEO Mark Zuckerberg, seeking to profit from advertisers trying to reach his companys 714 million users, needs to sustain ad prices amid competition from Google Inc. and Twitter Inc.

However Facebook has to be very careful and have a correct mix or else it would end up alienating users with a deluge of promotions, said Michael Gartenberg, an analyst at research firm Gartner Inc.

Theres a certain point where you get a backlash, like watching a TV show with too many commercials, Gartenberg said. Right now were not seeing any backlash, but its something theyre going to have to keep tweaking in terms of design.

Facebooks Fischer says the company takes steps to ensure that new ad features dont drive users away.

Testing

The success of any company is understanding its customers and the best way for a company like Facebook is to do testing.

Were constantly testing new ad formats, Fischer said. Weve found, frankly, that users are getting value and advertisers getting value in putting more ads in.

Facebook is really offering advertising that can attract companies large and small, said Debra Aho Williamson, an EMarketer analyst. Its really gunning on all fronts.

Revenues

Facebook, which gets more of Web users time than any other site, will more than double global ad revenue to $4.05 billion this year, according to EMarketer Inc., an Internet research firm based in New York

About 60 percent of Facebooks advertising revenue comes from self-serve ads, Williamson said. Companies bid for spots on user pages based on those peoples demographics or interests. These ads typically show up on profile pages or near photos.

The rest of revenue comes from ads placed on the home pages, where users typically begin sessions on the site. These spots are sold by Facebooks in-house marketing staff.

Something awesome

The company says that its advertisers are happy and they will always be loyal to Facebook and this will not change. With the amount of competition out there, the awesome news sure would boost ad sales.

Today CEO Mark Zuckerberg is to give a press conference regarding Facebook and all he said was its something awesome.

Well there is a rumor that the announcement is about a partnership between Facebook and Skype. Way back in May arabiangazette.com wrote about a possibility that Microsoft has taken over Skype to be integrated with Facebook.

The union would bring video-chat capabilities through Facebook, allowing multiple friends to talk at the same time.

A number of reports said that Wednesday’s Facebook show could take another direction and might be a showcase for new software, including potentially a new Facebook iPad app.

However, Facebook was not ready to reveal a new music partnership with the likes of Spotify, as has been rumored, a music industry source said.

Hangouts

Well this is a wise move according to experts. The social networking media lacks video chatting which an omission that come back to haunt it since Google launched its Hangouts application.

Jonathan a tech savy, self proclaimed geek told arabiangazette.com it is beaaauttifffull! referring to the hangouts option from Google. Its a beautiful video conferencing technology, the colors are wonderful and it just integrates everything together.

When asked if he would spend more time on Google+ or Facebook once the rumor of Skype partnership is confirmed, he was ambivalent. I might use both, but would I spend as much time on Facebook as I have, not sure.

A mother of three living in Dubai was ecstatic when she heard the news from us. You mean to say that I can not only post pictures I can also have a video voice chat with my family. Thats amazing, I can multitask and save time.

Well it seems that the playing field is sure big enough for everyone.

More after the awesome news release.

Source: Bloomberg, Fox News, BBC

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