Boston, MA, 11/20/2013 (wallstreetpr) – Social media sites like Facebook Inc (NASDAQ:FB) have never had it so good. Ad revenues are rising as all companies want to be on such sites. These sites offer targeted advertising and that lowers down the cost of advertising per view. It has an ugly downside also as Facebook has learnt quickly. Higher ad load (the number of ads per page view) discourages its users. Users may not object to some ads but if they find that their interactions are getting cluttered with many ads, they tend to shift to a more user friendly social media site, and they shift in droves as family, friends, acquaintances all shift along with one user.
This is further complicated with the usage of smartphones. Facebook was quick to recognize the growing usage of smartphones and devised their platform for this, leaving some competitors behind. Smartphones have even lesser space for displaying ads, as the screen sizes are very small as compared to laptops or desktops.
Facebook has also delayed launching several key features in advertising like video advertising. They fear that the bandwidth consumed by such ads would slow down smartphones. The success in the second quarter was far more moderate in the third quarter. Instead of increasing the ad load, the company has announced a freeze on this. The company realizes that it has to concentrate on improving its user base first rather than concentrate on only ad revenues. A welcome step, considering that there are indications that Facebook was losing the backing of its key target audience, the youngsters.
Apart from these steps, Facebook is also concentrating on their revenue paying advertisers. Concerned at losing out on key industries like automobiles, Facebook is moving aggressively to recruit industry specific advertising professionals. It managed to wean away Michelle Morris, auto lead at Google Inc. Michelle will be heading the division and give focus to improving advertising revenues from this key market.
The stock was trading at $46.36, a rise of 1.16% at the end of trading on November 19, 2013.
