This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Facebook Ad Model Is Friend to Small Firms

PALO ALTO, Calif. ( TheStreet) -- The erstwhile dorm-room start-up Facebook recently hit a major milestone, exceeding Google (GOOG) to become the most-visited Web site for the week that ended March 13. And if that bar graph at Hitwise is any indication, the social networking giant shows no signs of stopping.

For entrepreneurs looking to spread the word about their products, it makes sense to expand beyond Google advertising and explore options at Facebook.

Advertisers looking to target a specific audience can't do much better than Facebook, which collects personal information about its customers as a matter of course. Those who advertise their Web pages or businesses on Facebook can reach out to users based on age and birthday, geography, interests, education level and connections. Users can seek out a company by becoming a "fan" of the company's Facebook page or RSVP-ing to a company event via Facebook. Facebook ads also appear in the margins of user's profile pages.

Advertisers have the option of paying for ads based on the number of times users view the ad ("pay per impression") or the number of times users actually click on the ad to get to the company's Web page ("pay per click.") The advertisers set their daily ad budget when they create the ad with Facebook's ad creation tool, and Facebook stops displaying the ad when the budget reaches its limit.

The cost of Facebook ads is based on a system wherein similar ads compete for the privilege of appearing on a page, via a complex automatic auction. There's no set cost for Facebook ads, but the higher the daily budget, the more an ad will appear on a profile page. If the daily budget isn't reached because an ad keeps losing auctions, the excess money goes toward the next day's budget (similar to the "rollover minutes" concept of AT&T (T) cell phone plans).

Facebook ads, which appear in the right margin of a user's profile page, are small and fairly unobtrusive. They comprise a small photo and a few lines of text. Many users tune out online ads, so getting anyone to click on an ad can be a challenge, even when it perfectly matches the target audience. One proven tactic to improve Facebook click-through rates is to make the users laugh. The product manager at Raven , a small Internet marketing company, reports in the Search Engine Journal that he initially had lousy click-through rates when advertising an online scavenger hunt on Facebook. But his results improved dramatically when he ran a photo of a puppy instead of the company's logo. "Puppies are awesome," the ad read. "So is Ravenhunt. Play RavenHunt and win cool stuff."
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
AAPL $94.03 0.42%
FB $117.74 -0.70%
GOOG $696.33 -0.27%
TSLA $235.56 -2.60%
YHOO $36.20 -0.90%


Chart of I:DJI
DOW 17,721.49 -169.67 -0.95%
S&P 500 2,057.74 -23.69 -1.14%
NASDAQ 4,755.5320 -62.0620 -1.29%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs