The massive success of Facebook is something that has already been well documented. Launched by Mark Zuckerberg in February 2004, it has scaled insurmountable heights today, and has 2.2 billion monthly active users. The revenue that they earn is around US$40.653 billion, and Zuckerberg is the youngest billionaire ever.
The answer to Facebook's money-making strategy lies with the many advertisements that appear on the network itself, and the vast number of apps and games that are available to users as well.
The developers of these apps and the companies behind these ads share their revenue with Facebook and these are the only ways that this social networking website has become so rich. All this leaves advertisers with an interesting dilemma over whether they should advertise here or not, and fortunately the answer only points in one direction.
Does Advertising With Facebook Work
The simple answer to this question is a resounding yes. Advertising with Facebook works like a charm. The reason for this is the simple fact that there are more than a billion potential customers here, and each of these customers share personal information which is vital for determining an advertisers market penetration strategy.
One of the most essential rules of advertising is to target the customers who you feel will buy a particular product, and Facebook gives advertisers a platform to do just that.
To understand this better, a simple example will suffice. Say there is a company that develops video games, and wants to target a market that consists of boys between the ages 18 - 25 and love playing video games as well.
Facebook is the best platform to gather such potential customers at a common location and then advertise their product. They can launch banner ads or they can create a fan page or profile for the game, and then increase awareness about the video game.
This same strategy applies to other products and advertisers as well, because every seller knows the exact demographic profile of his potential customers.
How Facebook Advertising Actually Works
The first and foremost tool that is used for this purpose is the proverbial 'Like' button which is present on almost every webpage today. When a member sees a page that he likes and clicks on the Like button at the bottom, a link to the page gets displayed on his wall.
This increases the awareness about the particular page, and also compels other interested people to click on the link. This is a great method for creating a viral spread of a certain webpage.
Additionally, companies also have the option of creating fan pages. These are different from the profile pages of individuals, and companies use these pages to interact with customers. They invite them with several offers, provide real time interactions and hold may events and pass on many invitations to all the members of their fan pages.
Now come the ads that one sees after signing in to Facebook. These ads appear on the right side, and the profiles on which they appear are determined by the advertisers and Facebook themselves. The specifics of the age, the sex, the location and the interests of the targeted people are defined by the advertisers, so they have a chance of getting clicked on.
Apart from this, the concept is the same as the Pay Per Click (PPC) method that Google adopts. The only difference is that these ads are far more specific and are targeted at people who exactly fit the desired profile.
As you can see, there are several advantages of advertising on Facebook. A whole new realm of marketing known as Social Media Marketing has arisen as a result, and this provides advertisers with a great platform for reaching a specific set of potential customers directly. So yes, Facebook advertising does work, and it works wonders at that.