Location Is Everything: 74% of Facebook's 2009 Ad Revenue to Come From Local Ads

Facebook now has 250 million users spanning the globe, but when it comes to serving up ads, the social network is benefiting from a decidedly local approach. Ad research firm Borrell Associates says that of the $310 million in ad revenue it expects Facebook to rake in during 2009, three-quarters of it will come from local, location-based ads.

facebook adsBy comparison—if MySpace is still considered comparable—Borrell estimates MySpace will derive only 27% of its 2009 ad revenue from local ads. Moreover, Borrell says only 20% of social-network ad spending will come from local advertisers, essentially declaring Facebook the social-network local ad leader by a wide margin.

As advertising goes, Facebook was already king of the (admittedly not all that big) social media hill, and its user numbers have been increasing at a rate that competitors can't begin to compete with. The company added 50 million users between April and July of this year and is expected to top 300 million by year's end. The company has also taken steps to help advertisers better connect with users, tweaking the user interface to create a more robust community through its news feed and testing pop-up video ads for the first time.

Borrell's estimates, should they bear out, naturally bode well for Facebook. With more users jumping on Facebook by the hour—and spending more time on the site than any other—more and more advertisers are likely to find value in what Facebook can deliver in terms of audience. Facebook, on the other hand, has a unique opportunity to carve out a larger share of the $150 billion U.S. local ad market, no small sum even for a company now valued at $6.5 billion.

[via Inside Facebook]

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1 Comments

  • Jane Stone

    The ads that are shown in the screenshot in this article aren't local ads. The 74% of ad revenue that's generated from local advertising is from simple DIY text+image ads.

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    Jane Stone
    Business Development
    http://www.pointbanner.com