The History of Facebook Advertising

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How well do you know Facebook? Lots of marketers use the platform to promote their content and drive new business, but how good is your knowledge, really? Is Facebook advertising proving successful for you or your clients business? Facebook have made an incredible amount of changes to their advertising platform since 2004, creating a host of different options to target customers including – Lookalike audiences, Dark Posts and Retargeting ads.

As Facebook continues to evolve the advertising platform presents marketers with a huge amount of opportunity to provide contextual advertising for dream segments of their customers. In this slideshare we set out to chart the evolution of Facebook as an advertising giant and what the future may hold for it.

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  • Excellent information! The presenter seems to know very well the topic. As I was reading I was telling myself constantly YES, THAT'S RIGHT. By the way, for the past 120 days I'm doing Facebook ads therefore this information was even more valuable for me… - Greg
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The History of Facebook Advertising

  1. 1. FACEBOOKTHE GROWTH OF AN ADVERTISING GIANT
  2. 2. SO, YOU’RE A MARKETER… Works at HubSpot About
  3. 3. You know Facebook, right?
  4. 4. We thought so too. Until we realised just how much we DIDN’T KNOW about their advertising strategies over the last few years.
  5. 5. I mean, did you know that the first way to advertise on Facebook was through ‘Flyers’ and they have a ‘Marketplace’ where you can buy and sell your stuff?
  6. 6. WE DIDN’T! So we decided to share their story with you because as marketers we need to closely watch the trends in advertising, and with Facebook being such a big player, we can’t afford to miss a trick!
  7. 7. SO LET’S START AT THE BEGINNING
  8. 8. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  9. 9. Mark Zuckerberg launches ‘Thefacebook’ at Harvard University. It quickly starts to spread like wild fire.
  10. 10. Imagesource:Mashable Itlookslikethis
  11. 11. The majority of revenue comes from ‘Flyers’ which are mostly purchased by students or small local businesses for $10-$40 per day who want to target an ad to a specific college campus. Source: Quora.com
  12. 12. Flyers are advertisements displayed along the side of the Facebook homepage and are controlled by Facebook.
  13. 13. They are mostly used by Facebook members to advertise parties or other social events on campus.
  14. 14. Theylooklikethis Image source: College Web Editor
  15. 15. Andmakeup mostofFacebook’s revenue for thatyear Image source: College Web Editor Theylooklikethis
  16. 16. Facebooklaterchangesitto anauction-basedCPCmodel, calledFlyers Pro. Advertiserscansetamaxprice forwhatthey’rewillingtospend andcantargetbasedongender, age,location,politicalviews, relationshipstatus,education status,andworkplace.
  17. 17. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue 👤400,000 $382,000
  18. 18. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  19. 19. Itlookslike thisnow
  20. 20. THEFACEBOOK CHANGES ITS NAME TO FACEBOOK
  21. 21. Theyhaveonefulltimead salesman,KevinColleran. Hisfirstbigaddealcomes fromPartyPoker.
  22. 22. TheybuyadsonaCPA (Costperacquisition)basis, aflatfeeof$300foreach newsubscriberwhosigns upandputsatleast$50 intoagamblingaccount. Source: The Facebook Effect
  23. 23. ItisaHUGEdealfor Facebook’srevenueand bringsin$60,000each monthjustforthe200 membersonaverage whosignup! Source: The Facebook Effect
  24. 24. Itswiftlycomestoanend though,whenayearorso latergamblingisoutlawed intheUnitedStates,and FacebookdropsPartyPoker.
  25. 25. SURPRISINGLY, SOME MAJOR COMPANIES ARE ALREADY JOINING IN THE FACEBOOK ADVERTISING PARTY.
  26. 26. Appleisoneofthebiggest revenuegeneratingadvertisers in2005forFacebook. TheysponsoranApple‘Group’, whichpaysFacebook$1per month,permember.AstheApple groupgrows,Facebookbegins tomakehundredsofthousands ofdollarspermonth.
  27. 27. Anotherbigplayerinthe sponsoredgroupgame isVictoria’sSecret. Facebookrequiresthemto makeaminimummonthly paymentof$25,000. Source: The Facebook Effect
  28. 28. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue 👤5 million $9 million
  29. 29. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  30. 30. Imagesource:Mashable Itlookslike thisnow
  31. 31. Facebookallows everyoneover thirteen years old tobecome amember.
  32. 32. Theoffersfor partnershipsandbuy outsstarttofloodin.
  33. 33. MICROSOFT GETS LUCKY!
  34. 34. Andbecomesthe exclusive provider ofbanneradsand sponsoredlinks onthesite. Source: Microsoft.com
  35. 35. COMPANIES THAT TRY TO BUY FACEBOOK Viacom $1.5billion Yahoo 1billion MySpace Microsoft $15billion NewsCorp Unnamed NewYork Financier $10million NBC Friendster Google (twice)
  36. 36. COMPANIES THAT TRY TO BUY FACEBOOK Viacom $1.5billion Yahoo 1billion MySpace Microsoft $15billion 1.6%stakesold NewsCorp Unnamed NewYork Financier $10million NBC Friendster Google (twice) Declined Declined Declined Declined Declined Declined Declined Declined Declined
  37. 37. ZUCKERBERG HOLDS FIRM.
  38. 38. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue 👤12 million $48 million
  39. 39. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  40. 40. Itlookslike thisnow
  41. 41. FACEBOOK LAUNCHES MARKETPLACE, AN APP FOR CLASSIFIED LISTINGS.
  42. 42. Itisusedtolistwhatyou haveandwhatyouwant withinyournetworks. Randomfact: Thisideawascatalyzedby amock-upbuiltentirelyin ExcelbyJoshPritchard.
  43. 43. WAIT, WHAT? FacebookhadaBuy andSellMarketplace? Isitstillgoing?
  44. 44. YUP!
  45. 45. InMarch2009,Facebook approachesOodle,anonline classifiedadsservicecompany totakeovertheMarketplace. Source: Facebook
  46. 46. Theybuildanentirely new marketplace focusedon givingpeopleaplacetobuy, sell,orgivethingsawayto thepeopletheyknow.
  47. 47. Itstillcontinuestoday andlookslikethis
  48. 48. FACEBOOK LAUNCHES THE MOBILE VERSION OF ITS WEBSITE
  49. 49. Facebook’smobilewebsite letsuserssurfFacebookon awebsiteoptimised for small screens.Theycan uploadphotosandnotes,send andreceivemessages,wall posts,andpokesusingSMS.
  50. 50. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue 👤50 million $153 million
  51. 51. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  52. 52. Whiletherestoftheworldfalls intoarecession,Zuckerberg steps up theadvertisinggame atFacebook.
  53. 53. Anycommercialentitycan nowcreatea‘Page’forfree
  54. 54. Theintentionisthatthose Pageownerswillfind waystospend money throughadvertisingtheir FacebookPage.
  55. 55. Facebookinvests moreintheirmobile strategyandnow allowsmembersto commentonFriends’ statusupdates.
  56. 56. Theserviceissopopular thatnearlya million mobilecommentsare postedinthefirst24hours aftertheupdate’srelease. Source: Mashable
  57. 57. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue 👤150 million $272 million
  58. 58. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  59. 59. FACEBOOK BEGINS TO REALISE THEIR POTENTIAL FOR ONLINE AD DOMINATION.
  60. 60. Andstarttoprovide moreadvanced ad targeting options totheiradvertisers.
  61. 61. Theyintroduce language and geographical based ad targeting toenticemore advertisers
  62. 62. Pageowners canset up and manage theirown adsforthefirsttime.
  63. 63. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue Mobileuser 👤350 million $777 million 65 million
  64. 64. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  65. 65. FACEBOOK RELEASES THE FIRST MOBILE APP FOR FACEBOOK
  66. 66. Andintroduces the‘Like’ button forexternalsites
  67. 67. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue Mobileuser 👤600 million $1.8 billion 100 million
  68. 68. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  69. 69. FACEBOOK INTRODUCES SPONSORED STORIES FOR DESKTOP
  70. 70. Userswho ‘Like’ Ben&Jerry’s willseeupdateslikethisonein theirNewsFeed. Imagesource:TheNextWeb
  71. 71. Advertisers canchoose tohighlight particularuser actionssothatwe seetheiractivity inournewsfeed.
  72. 72. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue Mobileuser 👤845 million $3.71 billion 350 million
  73. 73. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  74. 74. INTRODUCES MOBILE ADS FOR THE FIRST TIME
  75. 75. Theyappear withinourNews Feed soasnot tointerruptour Facebookuser experience.
  76. 76. FACEBOOK INTRODUCES THE SOCIAL GRAPH
  77. 77. Whenauserfriendsanotheruser, Likesapage,commentsonaphoto, listenstomusic,orplaysagame, a connection is written to the Social Graph,whichisthen providedasdataforadvertisers.
  78. 78. Allofthesestoriesandthe subsequentconnections createvaluableandcompelling marketing opportunities forbusinessesonFacebook.
  79. 79. FACEBOOK INTRODUCES THE FACEBOOK EXCHANGE
  80. 80. It’sanewwayofpurchasing Facebookadsthrough real-time bidding. Advertisersandagenciesare abletousecookie-based targetingtoreachtheiraudience onFacebookwithmoretimely andrelevantmessages. Source: Facebook
  81. 81. FacebookExchangeadvertisers usefirst-partyandthird-partydata todecidewhotoserveadsto.First- partydatareferstothecookies thatsitesandadnetworksputon usersbrowsers,andthirdpartydata isinformationcollectedbyresearch firmsanddatabrokers.
  82. 82. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue Mobileuser 👤1.06 billion $5.85 billion 543 million
  83. 83. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded
  84. 84. FACEBOOK INTRODUCES LOOKALIKE AUDIENCES
  85. 85. Whichhelp advertisersreach potential customers whosharesimilar characteristicswiththeir currentones.
  86. 86. Advertisersareabletoupload theircustomerprofiles, referencedbyemailsorphone numbers,andthenFacebook targets asimilarprofileof Facebookusersfortheadvertiser. Thepersonalinformationof thelookalikeisnevergivenout.
  87. 87. Re-targetedadsnowappear intheNewsFeed.
  88. 88. TheymimicthelookofSponsored Stories,butareaimedatusers basedontheirbrowsing history outsideofFacebook.
  89. 89. IttakesdatafromtheFacebook Exchange Program (external sites)andplacesadsintheNews Feedinsteadofjusttherightside bar. 
  90. 90. Advertiserscannowcreate Unpublished Posts orDark Posts thatintentionallydonot appeartoallfansoftheirpage. 
  91. 91. Itmeansadvertiserscanpostanad totheirFacebookPageandchoose WHO fromtheirfanbasetoshow itto,basedonalltheusualtargeting criteriaASWELLasinterests.
  92. 92. Mobilehasclimbedsteadily upwardasapercentageof Facebook’stotaladrevenue. Itgrewfrom14% to23% to 30% andnowmadethebiggest quarteroverquarterjumpto41%. Source: AdAge Digital
  93. 93. “AsofJune30th,thereare 819millionmobilemonthly activeusersonFacebook, up51%overtheprevious year.” AdAgeDigital
  94. 94. 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q2 1,000,000,000 500,000,000 100,000,000 50,000,000 10,000,000 1,000,000 100,000 10,000,000,000 Usercount Revenue Mobileuser 👤1.15 billion $1.18 billion 819 million
  95. 95. SO WHAT’S NEXT?
  96. 96. Facebookhasstarted toreleaseregional data for thefirsttimetohelpadvertisers understandhowpeopleuse thenetwork.
  97. 97. Itisalsopartofalargerpush togoafterdollarsearmarked forTV commercials, thetop choiceamongadvertiserswhen theylaunchcampaigns. Source: yahoo news
  98. 98. “Theaveragetimespent dailywithdigitalmediais expectedtosurpassTV viewingforthefirsttime thisyear,according toeMarketer.”
  99. 99. AndFacebook’sad revenueisestimatedto reach$7.64B by 2014.
  100. 100. SO IT’S TIME TO START THINKING ABOUT YOUR ONLINE ADVERTISING STRATEGY, PEOPLE!
  101. 101. Areyoutakingfull advantageofallof Facebook’sadvertising features? WecompiledthebesttipsfromfourtopEuropean expertsonthesubject,soyoucanbecomeaFacebook AdvertisingMaster! Downloadyourcopyhere http://bit.ly/1aEtMCH

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