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

Market Eye

REUTERS SHOWCASE

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Cipla Shares

Cipla Shares

Cipla jumps after key generic launch.  Full Article 

Modi in Japan

Modi in Japan

Japan and India agree to boost strategic ties at summit.  Full Article 

Basel III Norms

Basel III Norms

RBI amends Basel III guidelines for banks.  Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Current Account

Current Account

Balance of payments surplus for third straight quarter.  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past.  Full Article 

Reuters India Mobile

Reuters India Mobile

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