5 Comments »According to Jim Breyer of Accel Partners (one of Facebook’s venture capital investors), Facebook will bring in over $100 million in revenue this year. That is much different than the estimated $30 million number that I passed around yesterday. We can derive a few possibilities from this statement:
- Facebook may very well have a general advertising click through rate of over 0.04%
- Facebook is doing a much better job recruiting large advertisers for advertising campaigns via Facebook groups (which costs an estimated $20,000 per month per campaign), news feed ads, and other custom campaigns
- Their average number of daily page views per active user is insanely high
The bottom line here is that Facebook may not be as bad at advertising as many have accused them of. Conversely, even if they quadruple their estimated click through rate of general advertising campaigns, they would still only be receiving a 0.16% click through rate. That’s definitely nothing to brag about. My suggestions for improving Facebook’s click through rate that I made yesterday still remain. Facebook needs to be the first in the industry to develop highly focused demographic targeted ads. This means ads that can target people by age, sex, location, interests and more. This would honestly be a revolution in online advertising and would put Facebook in the sole position of taking a chunk out of Google’s revenue. Either way, $100 million in revenue is still extremely impressive. That would put $6 billion at 60 times earnings rather than John Battelle’s suggested 200 times earnings. Still a huge multiple but getting closer to reality.
Update
Last night, one of my readers brought to my attention how Facebook is actually making the “$100 million” this year. Apparently Facebook had signed a $100 million advertising agreement with Facebook in August last year that extend through 2009. So my numbers were actually fairly accurate, and instead much of this year’s revenue for Facebook will most likely come from Microsoft. Earlier today, Valleywag elaborated on Facebook’s source of revenues. Ultimately, there are a lot of numbers being tossed around the valley currently regarding Facebook’s revenues. If Facebook decides to file for an IPO their actual revenues will come to light.
Why Facebook, Why Now?…
John Betelle set off the quintessential question, for the month, which is a question - at least the way he frames it - that usually refers to some point in our fragile lives that has come to an uncertain and perhaps perilous juncture. Or to an equally …
Why Facebook, Why Now?…
John Betelle set off the quintessential question, for the month, which is a question - at least the way he frames it - that usually refers to some point in our fragile lives that has come to an uncertain and perhaps perilous juncture. Or to an equally …
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Hmm…. A CPM of $2 for Facebook flyers with a CTR of 0.04%… that equals $5 per click.
It's fine if the CTR is dismal, but the pricepoint has to be low enough to justify it.
Even if they really had a CTR of 0.2% (which is about what BlogAds get), that'd still be $1/click.
In a world where you can buy plenty of Google ads for 25 cents to a buck a click, that's not good enough.
Hmm…. A CPM of $2 for Facebook flyers with a CTR of 0.04%… that equals $5 per click.
It’s fine if the CTR is dismal, but the pricepoint has to be low enough to justify it.
Even if they really had a CTR of 0.2% (which is about what BlogAds get), that’d still be $1/click.
In a world where you can buy plenty of Google ads for 25 cents to a buck a click, that’s not good enough.