Why advertisers benefit from the massive increase in Facebook ad spending
Did you know that the spending on Facebook ads has nearly doubled in less than a full year? That's exactly what has happened, so you need to figure out the how and the why behind it all! From the first quarter of 2011, until the end of the first quarter of 2012, advertisers spent 93% more on Facebook ads, nearly doubling the numbers from Q1-2010/Q1-2011.
Your first question may be "Why?" Well, that's not exactly an easy question to answer. The truth of the matter is that no one is really sure why. Of course, the fact that advertising on Facebook was something that was proven to be a successful method is an obvious reason why. But to say that was the only reason or the definitive reason would just be a logical deduction and not exactly a correct answer.
The truth of the matter is that many of the biggest brands on Facebook upped their spending, and they weren't necessarily forced to do so by higher prices. In fact, the prices (CPC) didn't start to spike until people started spending a lot more money. Then things went haywire for a short spell. So, the one logical conclusion is that some businesses simply wanted to expand on a working formula and to get in on the Timeline shift and trends shows that this will continue in the future as well.
Does the Increase in ad spending benefit you?
Was is Timeline that caused ads to become more effective, or was it the spending and mass influx of ads that caused them to become more effective? Is it a classic "chicken or the egg" argument? These questions seem fairly unimportant in the grand scheme of things. To summarize what happened: The largest companies started buying more ad space, and in conjunction with Timeline and higher quality ads, Facebook ads suddenly became more trustworthy. Today, more Facebook users than ever before find the ads to be friendly in nature, and the click-through rates are proving it.
So the bottom line for you as an advertiser should be to carry the mantra: Never look a gift horse in the mouth. Realize that the huge increase in spending actually worked out as a good thing. And although it did temporarily cause CPC rates to spike over 40% for three consecutive quarters, those numbers are actually evening out now and are tapering off.
Timeline doesn't display as many ads now. It's not capable of doing so. Ads of a higher quality are needed here, and thus all advertisers, whether big or small, are forced to focus more on quality than quantity. That has evened the playing field, so now even if you're not a huge spender you still do stand a chance in your respective niche. You still do benefit from the year's huge spending increases.
Thanks to Timeline, more users see ads in their line of sight. Thanks to the huge influx of spending and the focus on quality, more ads from more advertisers are taken more seriously.
Any way you slice it, it's a win-win for advertisers on Facebook.
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About the Author
© Article written by Craig Robinson, Editor and Media Coordinator at Qwaya.com - A Facebook campaign manager tool that you run through the web browser.
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