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Facebook: The future of its ad-supported business model

Published: January 2013 · Publisher: MarketLine
Facebook currently operates on an ad-supported business model. The main challenge to this has been proving a successful conversion rate from online adverts to meaningful sales for marketing investors.
Report Type Case Studies
Language English
Format Electronic (PDF)
Pages20
Frequency Updated Annually
Availability Will be emailed within 1 business day
Reference No. 0109-2766
Price € 369,00
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  • Description
  • Table of Contents
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Introduction

Facebook currently operates on an ad-supported business model. The main challenge to this has been proving a successful conversion rate from online adverts to meaningful sales for marketing investors. As a means to begin addressing the issue of allowing for a more targeted advertising approach and so higher sales conversions, Facebook has introduced Custom Audiences and more recently Graph Search.

Features and benefits

* The publisher's Case Studies describe topics such as innovative products, business models, and significant company acquisitions.
* Fact-based and presented in an accessible style, they explain the rationale of commercial decisions and illustrate wider market and economic trends.

Highlights

Facebook currently operates on an ad-supported business model which has proved moderately successful, with the company deriving 82% of its revenue from online advertising.
The Facebook mobile application is soaring in popularity with growing monthly active users, however with a significantly lower level of display advertising available on mobile devices this generates less advertising revenue per page than desktop devices.

Your key questions answered

* Is the ad-supported business model a viable strategy for future growth for Facebook
* How will the introduction of Graph Search influence Facebook's revenue stream
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TABLE OF CONTENTS
Overview 2
Catalyst 2
Summary 2
Facebook and its business strategy 5
Facebook, Inc. 5
The Facebook business model 5
Facebook’s ad services 6
The benefits of the ad-supported business model 8
Customizing the audience base 8
Network Effect 9
Mobile application 10
Facebook announces Graph Search 11
How Graph Search could add to the Facebook business model 12
The pitfalls of the facebook business model 13
Converting social media advertising to sales 13
General Motors plans to pulls Facebook Advertising 14
Conclusions 17
Facebook has adapted to the challenges of the ad-supported business model 17
Appendix 18
Sources 18
Further Reading 18
Ask the analyst 19
19
Disclaimer 19


TABLE OF FIGURES
Figure 1: Increase in Facebook Monthly Active Users millions 6
Figure 2: Facebook ad services 7
;Figure 3: Facebook custom audiences 8
Figure 4: The Network Effect 9
Figure 5: Mobile Monthly Active Users (MAU) 10
Figure 6: Mobile advertising 11
Figure 7: Facebook launches new product Graph Search 12
Figure 8: The purchase paths of new customers 13
Figure 9: Facebook Ad Manager interface 14
Figure 10: GM has withdrawn paid advertising but maintains its standalone profile page 15
Figure 11: Facebook revenue stream 16
Copyright © FriedlNet. You may share using our tools Please don't cut content from FriedlNet and redistribute by email or post to the web.