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Atlantic International Partnership Headlines: Ad gains shore up Facebook IPO prospects
Atlantic International Partnership Headlines: Ad gains shore up Facebook IPO prospects
If there are lingering doubts about Facebook’s IPO prospects, its fortunes in advertising should quell them.
Toronto,
Toronto,
United States of America
(prbd.net)
05/07/2011
By Jon Swartz, USA TODAY
http://www.usatoday.com/tech/news/2011-06-20-facebook-ad-gains-ipo_n.htm
SAN FRANCISCO — If there are lingering doubts about Facebook’s IPO prospects, its fortunes in advertising should quell them. A new report says the social-networking giant is poised to overtake Yahoo this year for top spot in the U.S. online display-ad market.
Facebook, which is likely to go public in a mega-initial stock offering next year, could rake in $2.19 billion in display-ad sales this year. That’s good for an 18% share of the $12.3 billion domestic market, eclipsing Yahoo’s 13% and Google’s 9.3%, researcher eMarketer says.
The lure of Facebook’s nearly 700 million members and the amount of time its fervent users spend on it has prompted advertisers such as Coca-Cola, JPMorgan Chase and Adidas to pour money into banner ads, videos, animated ads and sponsorships on Facebook, the study says.
Facebook’s display-ad revenue more than doubled in each of the past two years, and will surge 81% in 2011, eMarketer forecasts.
“There is room for plenty of growth in online advertising,” says David Hallerman, an analyst at eMarketer. He notes big advertising expenditures by automakers and makers of consumer-package goods, such as cereal and detergent.
Facebook had no comment.
Google remains dominant in online search advertising, with 76% of the $14.4 billion U.S. market for online search ads. But in display ads, Google will be in a dead heat with Yahoo in 2012, while Facebook will represent about one in five display-ad dollars, Hallerman says.
That not only bolsters the case for Facebook’s IPO, but underscores the pervasive power of social media as an advertising vehicle, he says.
Evidence is “everywhere,” says Victoria Ransom, CEO of Wildfire Interactive, a social-media marketing service that converts views and clicks on Facebook ads into sales leads. She says more businesses are finding social media — in particular, Facebook, Twitter and YouTube — as practical, effective vehicles to reach hundreds of millions of consumers of all ages at all times of the day.
The ad projections should also calm jittery investors, after Forrester Research wrote about Facebook’s weakness in generating online shopping and e-commerce sales, and the reluctance of some teens to use it to interact with brands.
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