More advertisers using Facebook

24 June 2009

PALO ALTO, California: The number of companies using the automated advertising system run by Facebook, the social networking pioneer, has tripled over the last year, according to Tim Kendell, its director of product marketing for monetization.

Brand owners are increasingly attempting to utilise the developing range of social media tools to connect with consumers, with Coca-Cola, Kraft and Starbucks among the most successful proponents of this strategy on Facebook thus far.

The website – which has 200 million users worldwide – is expected to generate ad revenues of over $300 million (€214m; £184m) in 2009, enhancing its position at the expense of rivals such as MySpace.

Upon its launch in 2007, Facebook's targeted advertising system, which allows marketers to place ads on the pages of its members based on their specific interests, caused some controversy.

However, Kendall said that the behavioural ad programme, which also lets companies amend ads during campaigns, and suggests keywords that can be used to target the right audience, "has been a steady, successful growth pattern."

More specifically, he argued there is now "a greater diversity of people using our ad system – lots of businesses, lots of local businesses finding success."

Facebook has also increased the number of interactive options available to brands looking to run advertising executions on its portal.

These "engagement ads" include features such as online videos which allow web users to become "fans" of particular products.

Debra Aho Williamson, an analyst at eMarketer, the research firm, said "everything is starting to solidify for them. They're definitely getting the hang of it."

However, TechCrunch, the digital media news service, has reported that advertisers have recently issued "scores of complaints", as the fees they were being charged by Facebook appeared to be inflated when compared with clickthrough rates.

Brandon McCormick, of Facebook, agreed that the organisation had witnessed an increase in what appeared to be "suspicious clicks."

Having "identified a solution" that was rolled out across the site, the company is also now "identifying impacted accounts and will ensure that advertisers are credited appropriately."

Data sourced from Bloomberg/Econsultancy; additional content by WARC staff