The History of Facebook Advertising

1. FACEBOOKTHE GROWTH OF AN ADVERTISING GIANT

2. SO, YOU’RE A MARKETER… Works at HubSpot About

3. You know Facebook, right?

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. 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. 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. SO LET’S START AT THE BEGINNING

8. RecentRecent 2013 2012 2011 2010 2004 2005 2006 2009 2008 2007 Founded

9. Mark Zuckerberg launches ‘Thefacebook’ at Harvard University. It quickly starts to spread like wild fire.

10. Imagesource:Mashable Itlookslikethis

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. Flyers are advertisements displayed along the side of the Facebook homepage and are controlled by Facebook.

13. They are mostly used by Facebook members to advertise parties or other social events on campus.

14. Theylooklikethis Image source: College Web Editor

15. Andmakeup mostofFacebook’s revenue for thatyear Image source: College Web Editor Theylooklikethis

16. Facebooklaterchangesitto anauction-basedCPCmodel, calledFlyers Pro. Advertiserscansetamaxprice forwhatthey’rewillingtospend andcantargetbasedongender, age,location,politicalviews, relationshipstatus,education status,andworkplace.

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

19. Itlookslike thisnow

20. THEFACEBOOK CHANGES ITS NAME TO FACEBOOK

21. Theyhaveonefulltimead salesman,KevinColleran. Hisfirstbigaddealcomes fromPartyPoker.

22. TheybuyadsonaCPA (Costperacquisition)basis, aflatfeeof$300foreach newsubscriberwhosigns upandputsatleast$50 intoagamblingaccount. Source: The Facebook Effect

23. ItisaHUGEdealfor Facebook’srevenueand bringsin$60,000each monthjustforthe200 membersonaverage whosignup! Source: The Facebook Effect

24. Itswiftlycomestoanend though,whenayearorso latergamblingisoutlawed intheUnitedStates,and FacebookdropsPartyPoker.

25. SURPRISINGLY, SOME MAJOR COMPANIES ARE ALREADY JOINING IN THE FACEBOOK ADVERTISING PARTY.

26. Appleisoneofthebiggest revenuegeneratingadvertisers in2005forFacebook. TheysponsoranApple‘Group’, whichpaysFacebook$1per month,permember.AstheApple groupgrows,Facebookbegins tomakehundredsofthousands ofdollarspermonth.

27. Anotherbigplayerinthe sponsoredgroupgame isVictoria’sSecret. Facebookrequiresthemto makeaminimummonthly paymentof$25,000. Source: The Facebook Effect

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

30. Imagesource:Mashable Itlookslike thisnow

31. Facebookallows everyoneover thirteen years old tobecome amember.

32. Theoffersfor partnershipsandbuy outsstarttofloodin.

33. MICROSOFT GETS LUCKY!

34. Andbecomesthe exclusive provider ofbanneradsand sponsoredlinks onthesite. Source: Microsoft.com

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. 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. ZUCKERBERG HOLDS FIRM.

40. Itlookslike thisnow

41. FACEBOOK LAUNCHES MARKETPLACE, AN APP FOR CLASSIFIED LISTINGS.

42. Itisusedtolistwhatyou haveandwhatyouwant withinyournetworks. Randomfact: Thisideawascatalyzedby amock-upbuiltentirelyin ExcelbyJoshPritchard.

43. WAIT, WHAT? FacebookhadaBuy andSellMarketplace? Isitstillgoing?

44. YUP!

45. InMarch2009,Facebook approachesOodle,anonline classifiedadsservicecompany totakeovertheMarketplace. Source: Facebook

46. Theybuildanentirely new marketplace focusedon givingpeopleaplacetobuy, sell,orgivethingsawayto thepeopletheyknow.

47. Itstillcontinuestoday andlookslikethis

48. FACEBOOK LAUNCHES THE MOBILE VERSION OF ITS WEBSITE

49. Facebook’smobilewebsite letsuserssurfFacebookon awebsiteoptimised for small screens.Theycan uploadphotosandnotes,send andreceivemessages,wall posts,andpokesusingSMS.

52. Whiletherestoftheworldfalls intoarecession,Zuckerberg steps up theadvertisinggame atFacebook.

53. Anycommercialentitycan nowcreatea‘Page’forfree

54. Theintentionisthatthose Pageownerswillfind waystospend money throughadvertisingtheir FacebookPage.

55. Facebookinvests moreintheirmobile strategyandnow allowsmembersto commentonFriends’ statusupdates.

56. Theserviceissopopular thatnearlya million mobilecommentsare postedinthefirst24hours aftertheupdate’srelease. Source: Mashable

59. FACEBOOK BEGINS TO REALISE THEIR POTENTIAL FOR ONLINE AD DOMINATION.

60. Andstarttoprovide moreadvanced ad targeting options totheiradvertisers.

61. Theyintroduce language and geographical based ad targeting toenticemore advertisers

62. Pageowners canset up and manage theirown adsforthefirsttime.

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

65. FACEBOOK RELEASES THE FIRST MOBILE APP FOR FACEBOOK

66. Andintroduces the‘Like’ button forexternalsites

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

69. FACEBOOK INTRODUCES SPONSORED STORIES FOR DESKTOP

70. Userswho ‘Like’ Ben&Jerry’s willseeupdateslikethisonein theirNewsFeed. Imagesource:TheNextWeb

71. Advertisers canchoose tohighlight particularuser actionssothatwe seetheiractivity inournewsfeed.

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

74. INTRODUCES MOBILE ADS FOR THE FIRST TIME

75. Theyappear withinourNews Feed soasnot tointerruptour Facebookuser experience.

76. FACEBOOK INTRODUCES THE SOCIAL GRAPH

77. Whenauserfriendsanotheruser, Likesapage,commentsonaphoto, listenstomusic,orplaysagame, a connection is written to the Social Graph,whichisthen providedasdataforadvertisers.

78. Allofthesestoriesandthe subsequentconnections createvaluableandcompelling marketing opportunities forbusinessesonFacebook.

79. FACEBOOK INTRODUCES THE FACEBOOK EXCHANGE

80. It’sanewwayofpurchasing Facebookadsthrough real-time bidding. Advertisersandagenciesare abletousecookie-based targetingtoreachtheiraudience onFacebookwithmoretimely andrelevantmessages. Source: Facebook

81. FacebookExchangeadvertisers usefirst-partyandthird-partydata todecidewhotoserveadsto.First- partydatareferstothecookies thatsitesandadnetworksputon usersbrowsers,andthirdpartydata isinformationcollectedbyresearch firmsanddatabrokers.

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

84. FACEBOOK INTRODUCES LOOKALIKE AUDIENCES

85. Whichhelp advertisersreach potential customers whosharesimilar characteristicswiththeir currentones.

86. Advertisersareabletoupload theircustomerprofiles, referencedbyemailsorphone numbers,andthenFacebook targets asimilarprofileof Facebookusersfortheadvertiser. Thepersonalinformationof thelookalikeisnevergivenout.

87. Re-targetedadsnowappear intheNewsFeed.

88. TheymimicthelookofSponsored Stories,butareaimedatusers basedontheirbrowsing history outsideofFacebook.

89. IttakesdatafromtheFacebook Exchange Program (external sites)andplacesadsintheNews Feedinsteadofjusttherightside bar.

90. Advertiserscannowcreate Unpublished Posts orDark Posts thatintentionallydonot appeartoallfansoftheirpage.

91. Itmeansadvertiserscanpostanad totheirFacebookPageandchoose WHO fromtheirfanbasetoshow itto,basedonalltheusualtargeting criteriaASWELLasinterests.

92. Mobilehasclimbedsteadily upwardasapercentageof Facebook’stotaladrevenue. Itgrewfrom14% to23% to 30% andnowmadethebiggest quarteroverquarterjumpto41%. Source: AdAge Digital

93. “AsofJune30th,thereare 819millionmobilemonthly activeusersonFacebook, up51%overtheprevious year.” AdAgeDigital

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. SO WHAT’S NEXT?

96. Facebookhasstarted toreleaseregional data for thefirsttimetohelpadvertisers understandhowpeopleuse thenetwork.

97. Itisalsopartofalargerpush togoafterdollarsearmarked forTV commercials, thetop choiceamongadvertiserswhen theylaunchcampaigns. Source: yahoo news

98. “Theaveragetimespent dailywithdigitalmediais expectedtosurpassTV viewingforthefirsttime thisyear,according toeMarketer.”

99. AndFacebook’sad revenueisestimatedto reach$7.64B by 2014.

100. SO IT’S TIME TO START THINKING ABOUT YOUR ONLINE ADVERTISING STRATEGY, PEOPLE!

101. Areyoutakingfull advantageofallof Facebook’sadvertising features? WecompiledthebesttipsfromfourtopEuropean expertsonthesubject,soyoucanbecomeaFacebook AdvertisingMaster! Downloadyourcopyhere http://bit.ly/1aEtMCH