Exclusive - Facebook reaches 1 million active advertisers

REUTERS Wed Jun 19, 2013 6:47am IST

A Facebook logo is attached to the windows of the NBC store inside of Rockefeller Center in New York April 30, 2013. REUTERS/Lucas Jackson/Files

A Facebook logo is attached to the windows of the NBC store inside of Rockefeller Center in New York April 30, 2013.

Credit: Reuters/Lucas Jackson/Files

Stocks

   

REUTERS (Reuters) - Facebook Inc (FB.O) said on Tuesday it now has 1 million active advertisers globally who used the platform in the last 28 days, a milestone for the company that is seeking to revive its revenue growth.

A vast majority of those advertisers are small business owners who have flocked to the world's No. 1 social network.

Facebook executives are hoping to net even more small advertisers since 16 million local businesses, ranging from jewelry sellers to clothing stores, set up free pages on the network.

While pinpointing how much money small advertisers spend only online is difficult, in total they spent approximately $32 billion during 2012 in the United States, according to market research firm eMarketer.

"Most small business owners start off as Facebook users, then migrate to become page owners, and from there migrate to become advertisers," said Dan Levy, Facebook director of small business.

He said that Facebook does not plan to start charging businesses to set up pages.

Advertising accounts for 85 percent of Facebook's revenue - which also includes dollars from the world's largest brands and advertising agencies. But the company is trying to spark its ad growth following a sharp slowdown last year.

Last quarter, Facebook reported first-quarter revenue of $1.46 billion. Advertising revenue rose 43 percent, the fastest growth rate since the end of 2011.

Facebook declined to break out how much ad revenue comes from small businesses and did not indicate how long it took to reach the 1 million milestone.

It has introduced several initiatives to help boost growth, including an overhaul of its newsfeed and changes to how advertisers buy ads on the network in order to simplify the process.

Small business owners are "critical" to Facebook's success, said Brian Wieser, an analyst with Pivotal Research Group.

"Once they launched new ad products targeted to small businesses in the middle of last year, they were able to significantly accelerate their revenue growth," he said.

Kim Caulfield, a small business owner in Orange County, California who sells custom jewelry made from horse tail hair, started using Facebook advertising to reach more customers for her company Tail Spin.

"You only can invite so many of your friends over and most of them don't own horses," she said.

She now spends approximately $25 a day with Facebook on advertisements directed to horse enthusiasts with the potential of reaching over 5 million people.

Facebook also reaches out to local businesses order to help them through the process. Dallas-area clothing boutique owner Lucy Huang said she was part of a Facebook incubator program to mentor businesses and walk them through the ad buying process.

Huang said she spends roughly $50 a month advertising Accents retail stores with Facebook, saying it is cheaper and more effective than print or online rivals like Yelp (YELP.N).

More than 50 percent of small business owners use Facebook pages to promote their products, but only 16 percent use Facebook ads, according to BIA Kelsey, a research firm specializing in local advertising. (Reporting by Jennifer Saba in New York; Editing by Nick Zieminski)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Shares Hit Record

Sensex, Nifty rise to second consecutive record high

Sensex surges 500 points on BOJ easing, L&T gains

The BSE Sensex and Nifty surged to record highs for a second consecutive session on Friday after Bank of Japan's surprise expansion of its massive stimulus programme raised hopes for additional foreign inflows, boosting blue-chips such as Larsen & Toubro.  Full Article 

REUTERS SHOWCASE

Wilful Negligence?

Wilful Negligence?

SEBI piles pressure on Sahara to sell overseas hotels  Full Article 

Indian Economy

Indian Economy

India's fiscal deficit in H1 almost 83 pct of full-year target.  Full Article 

M&M Earnings

M&M Earnings

M&M Q2 net profit down 4 percent, hit by poor monsoon.  Full Article 

Ban on E-Cigs?

Ban on E-Cigs?

Govt considers ban on e-cigarettes, sale of single smokes.  Full Article 

Commodities

Commodities

Silver futures in India hit four-year low on global cues.  Full Article 

BOJ Policy

BOJ Policy

BOJ shocks markets with surprise easing as inflation slows.  Full Article 

Shadow Banking

Shadow Banking

China's shadow banking sector growing rapidly, third largest in world - FSB.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage