How Facebook Became the World’s Largest Advertiser

By Austin Lovvorn

Online display advertising is becoming a thing of the past and you can thank social media for that.   Facebook is on its way to becoming the highest grossing media property in history.  Facebook has created an advertising product platform that the world has never seen before.  The mentality behind Facebook advertising is delivering relationships, not impressions.    Throughout the first hundred years of advertising, TV, radio, and print were the main avenues in which companies got their messages across to the consumer.  The Internet is relatively new to advertising, but is already evolving in the $540 billion market.  Since relationships are worth a million times more than an impression, Facebook is in the driver’s seat when it comes to delivering such a hot commodity.

Facebook rules the digital media world with over 900 million users, pulling in 1 in 7 minutes of their online attention, and creating over 500 billion page views per month.  Facebook is strategically using their power not to overpopulate their users with banners, as that was part of Myspace’s 2007 meltdown.  Facebook ultimately controls their pricing because of the sole fact that there are no other products that offer the same services they do.    Facebook is the world’s largest relationship broker, controlling where the relationship can be created and making it very easy to direct any of its 900 million users to purchase certain products or services.

Media advertising should add value to the content to be effective.  It’s almost a game advertiser’s play to blend fancy advertisements to look identical to the print content just so readers will not hesitate to keep reading.    This technique is virtually impossible to replicate online.  Online advertisements are often looked at as a tradeoff for the price the user has to pay to access the data.  Facebook was never created with the intentions to make money off advertisements; the ultimate goal was always focused on the user’s experience.

Facebook has the ultimate advantage owning such a rich dataset on it’s more than 900 million users.    This data is tremendously valuable due to amount of variables allowing it to target extreme specifics.  Facebook, knowing their data is extremely valuable, tends to lend it very sparingly.