Aepoc, CC.
See Also:
THE BRIEF: Ricky Strauss Is Disney’s New Marketing Head; OgilvyOne Loses Its CCO; Today’s Other Need-To-Know Advertising News
Proof That Olivia Munn’s Nude Ads For PETA Are Heavily Photoshopped
Insiders Say How To Play The New York Real Estate Game This Year
Facebook’s cost-per-thousand ad impressions rose 8 percent between Q3 and Q4 2011, and 23 percent since Q1, according to data from TBG Digital, an agency that specializes in placing and serving Facebook advertising.
The numbers bode well for Facebook’s IPO, expected in the spring. Cost-per-thousand impressions (CPMs) are the money the social network earns by selling ads. The more it can charge, the greater Facebook’s dollar revenue is likely to be.
TBG Digital culled the data from 266 clients and 326 billion impressions it handled during Q4 2011. Its clients include Dell, Coca-Cola and Heineken.
Facebook gets a global average CPM of 22 cents, according to TBG Digital CEO Simon Mansell. “They are driving that CPM up … to have that CPM number creeping up, that’s the important number for them” in terms of pricing the IPO against future revenues.
Mansell (pictured below) declined to say what he thought Facebook’s Q4 revenue would look like in actual dollars, but said he thought our earlier estimate — of about $3.6 billion for 2011 — was in the right ballpark.
TBG Digital
That’s the good news. The not-so good news is that Facebook remains heavily dependent on just a few business sectors for its revenue. Facebook’s top advertisers are finance brands and games, at 18 percent and 13 percent of impressions, respectively (see charts in the following slide show).
That doesn’t sound too bad until you realize that those shares are calculated after TBG Digital excluded one large gaming client from the analysis: “We’ve excluded an advertiser here because it skews the numbers,” mansell said, cryptically. He declined to name the advertiser but it’s probably Zynga, which pays Facebook a 30 percent cut every time someone buys something in a game via Facebook Credits, and is constantly seeking new players on Facebook.
In other words, Facebook remains heavily dependent on Zynga’s health for a portion of its revenue.
The other story in the numbers is the effect of Sponsored Stories, the new Like-based ad function that rolled out in Q4. It’s working, Mansell says. “Those get a better click-through rate than normal Facebook ads [such as the display boxes you see on the right side of the page]. That allowed advertisers to pay a lower cost-per-click.”