Facebook has a lot going for it lately. They’ve got more than 250M users worldwide, they’re the most popular social network in almost every country in the world, they’re hiring in a down economy, and according to a new comScore report, 8.2% of all Internet ads are served on their site.
But, then, maybe this all makes sense. Since Facebook is so popular, it’s not entirely surprising that they serve one out of every twelve online ads. Even better? At least some proportion of their on-site CPC ads lead to another page on the site—so they’re getting money and traffic.
This isn’t a recent development, of course—we’ve all seen ads to “Become a Fan” of something on Facebook. But as smart as it sounds to make your advertisers pay for generating traffic to your site, the underlying logic is pretty much a stroke of genius:
Facebook is an Internet unto itself.
Facebook has long been accused of being a “walled garden”—with its fan pages, apps and other utilities, FB is almost a subset of the offerings of the Internet. If your brand is prominent enough, you’re on Facebook (or you should be!). Driving paid traffic from a personal page (personal) to a branded page only makes sense on that kind of paradigm.
Of course, that kind of advertising is good for advertisers, too, or they wouldn’t do it. JCPenney went from 22,000 fans to 500,000 fans with these advertisements in the run-up to back-to-school shopping (though Bloomberg didn’t say if JCP saw increased revenue from this).
And something seems to be working for FB, too. Last month, Bloomberg said the most popular social network in the world should post at least $500 million in revenue this year.
What do you think? Is Facebook a subset of the Internet, and is internal paid advertising a natural extension of that mentality? Can Facebook sustain this kind of revenue?