how exactly does facebook make money?

[destrekor]

How the hell do you think Google makes so much money? And for that matter... why the hell Google even dips into so many different types of markets? To get more ads to the people... and often, more personalized ads.

Ads don't work on every single individual, but in general, they work very well for capitalistic civilizations. They fact that ads are such a huge market in of itself has to demonstrate some truth to that - why else do corporations shell out so much money for prime blocks of advertisement? Look at how much Super Bowl commercials cost - and how much money sometimes the ads cost to even produce, let alone the pricetag to get it shown to people.

Do you really think companies/groups do all these great things for their user-base, simply because they are nice?

Sometimes it starts out that way, but after awhile, the cost of keeping the services alive requires people to start figuring out how to fund the service. Free services are great, but they aren't free because people are nice - and that's why Facebook expanded to everyone, and not just college users... more people using the service = more advertising potential.

 

[mizzou]

How the hell do you think Google makes so much money? And for that matter... why the hell Google even dips into so many different types of markets? To get more ads to the people... and often, more personalized ads.

Ads don't work on every single individual, but in general, they work very well for capitalistic civilizations. They fact that ads are such a huge market in of itself has to demonstrate some truth to that - why else do corporations shell out so much money for prime blocks of advertisement? Look at how much Super Bowl commercials cost - and how much money sometimes the ads cost to even produce, let alone the pricetag to get it shown to people.

Do you really think companies/groups do all these great things for their user-base, simply because they are nice?

Sometimes it starts out that way, but after awhile, the cost of keeping the services alive requires people to start figuring out how to fund the service. Free services are great, but they aren't free because people are nice - and that's why Facebook expanded to everyone, and not just college users... more people using the service = more advertising potential.

hey, keep in mind I'm basically griping about those 1 sec pop ups and window ads that look like crap

I've never seen a well put together advertisement on facebook

 

[pray4mojo]

if you havent noticed by now, the ads are based on the information facebook collects from you. if youre seeing an ad about hairgrowth...

 

[mizzou]

if you havent noticed by now, the ads are based on the information facebook collects from you. if youre seeing an ad about hairgrowth...

 

[BeauJangles]

bullshit, building credibility is the best way to sell your crap

then you can pander your wares



WTF is this shitty link with the same picture of that person on the other 100 ads I've seen? Oh that's right, it's fucking spam "AVOID!"

Any business worth buying stock, does not advertise like a goon on facebook.

You want to tell me that www.totalhairregrowth.com is minting gold off of it's facebook ad? I highly doubt it!


I do see something with an established company simply expanding it's base, but thinking you can advertise and get customers is pretty fail. Those ads just scream "spam/fake"


There is no science in advertisement, just people making money off of weak / strong businesses.


Here's a comment you can rip apart that I will stand by

"Budweiser would still be king, even without being king of the commercials"



I won't go to court and defend this position, but I sure as hell love trying to promote it

Oh boy you are so wrong it hurts.

There literally THOUSANDS of studies that prove that certain advertising methods are far, far, far more effective than others. Advertising is by no means a science, but it does require some skill and brainpower.

The reason you see the same text and images and products being advertised is because they sell. That's it. There's no secret. Remember acai berries? teeth whitening? Google Money Tree? All those things were crap too, but they sold like crazy. Why? Because people figured out how to market them. They created flogs (fake blogs), farticles (fake news articles), fake forums, etc, etc -- they emulated what has been done in print for years (the advertorial) with shockingly good results.

edit: The above three things (teeth whitening, bizopps, and acai berries) ALL made hundreds of millions of dollars for the scammers that ran them. Selling has nothing to do with pre-existing credibility, it has to do with manipulating people into buying what you want them to buy. You can make yourself sound credible (whether you are or aren't), you can make your sales copy compelling, and you can figure out the things that make people push the buy button more often than not.

Plenty of 'legitimate' companies advertise on facebook too. A friend of mine runs a multimillion dollar business that works exclusively with Google, Yahoo, and Facebook to place advertisements. He gets a huge portion of his business from Facebook.

Another fun factoid. Ever seen ads for this? http://www.truthaboutabs.com/

That guy has cleared over $10,000,000 selling a fucking e-book about losing weight. Look at his sales copy. Whether you believe it or not, that sales page is one of the most successful sales pages on the internet.

Any business worth buying stock, does not advertise like a goon on facebook.

Yeah because companies like Amazon, Groupon, Verizon, Comcast, Time Warner, Toyota, Lexisnexus, ABC, Lexus, Mercedes, BMW, British Petroleum, Visa, Mastercard, and the tens of thousands of local businesses that advertise on Facebook aren't legit... right.

There are a lot of scammers on the internet looking to make a quick buck (see the acai / teeth whitening / google money tree / etc), but there are a lot of scammers in real life doing the exact same thing. Facebook has both legitimate and non-legitimate ads. They've done an amazingly effective job of blocking and banning ads to continuity offers, but they hasn't rid them of other scammy things and they have thousands of businesses clamoring to put themselves on Facebook.

 

[Schfifty Five]

I think there are advertisements and spam everywhere, but I obviously ignore them all. I and all my friends have spent $0.00 while on facebook, and $0.00 on it's advertisements.

How exactly is this a huge "business"? Is it just for the exposure?

Well, the companies that want space on FB to put their ads up pay them millions of $. So you and your friends spending $0.00 doesn't really make a difference to FB in terms of getting revenue from Ads.

 

[zerocool84]

Well, the companies that want space on FB to put their ads up pay them millions of $. So you and your friends spending $0.00 doesn't really make a difference to FB in terms of getting revenue from Ads.

This guys think just because he hasn't bought anything from an advertisement that NO one in the whole world has.

 

[BeauJangles]

Do you want an example of the type of page that sells incredibly well on the internet?

http://www.newsdaily7.com/

or

http://jayweintraub.typepad.com/.a/6a00d83451611f69e201156f65c2a6970b-320wi


Those types of landers (the farticle and the flog, respectively) have made hundreds of millions of dollars. That isn't hyperbole. They've minted money for people who have run them because, to the average user, it doesn't look like an advertisement. It looks like someone's blog or some news page and that immediately adds authority and credibility to the story.

In the case of the flog, the viewer thinks, "well I can certainly trust the opinion of a fellow consumer regarding this product." For the farticle, they think, "well, it's a new source so it must have some sort of authority."

Again, these ideas aren't new. These type of ads exist in print media and have been used incredibly effectively over the last fifty years.

 

[BeauJangles]

Well, the companies that want space on FB to put their ads up pay them millions of $. So you and your friends spending $0.00 doesn't really make a difference to FB in terms of getting revenue from Ads.

Again, incorrect.

Facebook cares VERY deeply about what is advertised on its servers. If they didn't care, they would have never banned continuity offers. People were running millions of dollars a day into FB to advertise continuity offers and Facebook banned them all. Why? Because users got pissed off that the ads were shady, that the products didn't work, and that they got hit with huge rebills.

Pissed off users won't click ads. If nobody clicks ads, then nobody advertises on Facebook.

As for the advertisements themselves, I can give you a big hint. If you see an ad on Facebook over the course of a few weeks, it's probably attaining its goal (whether that's to add a new subscriber to the next Twilight movie's mailing list at a cost of $.05 / subscriber, or whether that's to sell the user a product, or whether that's to get a user to fill out a form). All of this data is tracked, processed, and analyzed. Ads are tweaked to improve their click-through-rates, to improve their targeting, and to scale them into larger demographics based on what users are clicking which ads.

Don't be foolish. Facebook makes lots of money from ads. So does Google. So does Yahoo. So does Bing. It isn't just blind luck.

 

[mizzou]

Im sort of self.centered if you havent noticed heheh

 

[silverpig]

The same way all the other internet companies do: selling stock!

 

[gevorg]

Police/FBI "really" like Facebook.

/tinfoil

 

[coloumb]

google search:

"How does facebook make money"

result:

http://www.businessinsider.com/how-does-facebook-make-money-2010-5

Self-service ads, which appear on the right side of the screen on Facebook, accounted for about $250 million to $300 million. Engagement ads, which seek user-interaction (and sometimes feature user-endorsements), brought in $100 million. As a part of a 2007 ad deal, Microsoft sells some ads on Facebook. It's payment for the privilege reached $50 million in 2009. Finally, Facebook Gifts and other virtual goods account for between $30 million and $50 million in 2009

It's kind of the same reason why commercials cost exponentially more during Superbowl than any other time during the year.

 

[MrX8503]

Just because a lot of people don't click on the ads doesn't mean that no money is being made. There is a small percentage that do click on the ads and when you compound this by millions, billions of views, this is big bucks.

The same thing applies to spam. Maybe you only get 10% who will click through, so what you do is send out millions of spam emails.

 

[GodlessAstronomer]

I don't see any ads on Facebook I even disabled my ad blocker.

 

[Sumguy]

I don't see any ads on Facebook I even disabled my ad blocker.

Why'd you blur out your face? We already know what you look like.

http://forums.anandtech.com/showthread.php?t=2073841&highlight=beard

 

[GodlessAstronomer]

Why'd you blur out your face? We already know what you look like.

http://forums.anandtech.com/showthread.php?t=2073841&highlight=beard

No reason really, I have no pretenses of privacy here. It would be trivial for anyone to find my FB profile by following one of the links in my sig, but I was blurring my friends so I just did me too.

 

[AnonymouseUser]

Facebook makes millions because they cater to dumb people (no, I don't believe everyone that uses FB is dumb, just most). People actually spend real money on those stupid fucking games for crying out loud!

Anyway, I'm becoming tempted to join FB lately just so I can block my SO from my news feeds, and then de-friend her, just to make a point. We've already had several arguments over that goddamn website, and she spends way too much time on it as it is. I've blocked the apps at work, and believe me, I've even tried to block FB entirely.

One thing I can tell you, Zynga has mastered the art of social engineering. They know Facebook is just a game, and they're dominating.

 

[Bateluer]

They sell incredibly valuable marketing data to all of their clients. The data is complied from individual member's internetting habits. It's all anonymous, though (basically random computers sharing the data to other computers, no personal information included). Ironically, this is the least of Facebook's real privacy concerns, yet it seems to be the one that its critics bitch about the most.

Or something like that.

This. QFT.

There's a few Firefox addons that block a lot of Facebook's crap though.

 

[RelaxTheMind]

12% of my traffic came from facebook at one point... quality cx's too as opposed to someone googling and just looking around or finding by accident.

35y+ age range is a gold mine.

 

[speg]

Facebook ads are sweet. I have a musician in my interests and when they put out a new single, bam! a Facebook ad was the first to let me know. I clicked on it and bought it.

 

[rudder]

They're about to hit $1B in revenue. Why in the hell would they start charging?!?!?

My thoughts exactly. There are 500 million users. If only 10% of them are dumb enough to spend money on things like farmville... that is still a shit ton of money.

 

[nanette1985]

One more thing about internet ads: you can test them instantly. If you put an ad in a magazine, and have two versions of the ad to test to see which gets more response, you have to wait until the magazine comes out, wait to see if either ad tests better, and then try another test - months go by. On the internet, you can do that in hours. So you can test and test and figure out really quickly how to get a very successful ad.

Facebook is awesome for ad testing since there is a huge pool of potential responders, you have a lot of data about your audience, and FB's people are really good to work with.

I used to write ad copy for internet testing, until I got sick.

 

[Kev]

Don't be foolish. Facebook makes lots of money from ads. So does Google. So does Yahoo. So does Bing. It isn't just blind luck.

Actually Facebook doesn't make a lot of money on ads. Here's an article on how they plan to really make money:

http://www.businessweek.com/magazine/content/10_40/b4197064860826.htm

Limited to small rectangular boxes with a photo and only 160 characters of text, the average ad is clicked on by less than a tenth of a percent of the site's users, according to advertisers and analysts, including Greg Sterling, a San Francisco-based Internet marketing consultant. Google ads, which are triggered by searches for specific topics such as "new diet plans" or "SUV or minivan" can draw clicks from up to 10 percent of all searchers. They are also far more expensive.

 

[Sureshot324]

Even if you don't click on the ads you're seeing them which puts the company+logo in your mind.