Facebook Advertising: Brands Can’t Buy Enough

If you’re wondering how Facebook is performing among large brands, look no further than Barry Diller.

In a CNN Fortune interview, Diller, the chairman and CEO of IAC, couldn’t speak highly enough about Facebook’s advertising offering, saying: “Facebook’s great advertising. My company, which spends a huge amount on advertising, we spend every nickel we can on Facebook. They’re effective. The targeting of the audience is precise enough. Facebook is going to be a very, very big player in advertising.” (IAC’s businesses include Ask.com, Match.com, Citysearch, Evite, ServiceMagic, and Gifts.com.) You can see him talk about Facebook at the 2:45 point in the video below:

This view dovetails with Mike Murphy’s outlook. Since joining Facebook in 2005 as VP of Global Sales, he’s seen brands and agencies change their tune. The social network was originally seen as a nice way to reach students, although the site’s effectiveness was widely questioned. Now, with a massive global audience and top brands relying on the platform to connect with their customers, Facebook has ad relationships with 83 of the top 100 advertisers. “Somewhere midway between 5 million to 500 million, we became far more relevant to marketers,” he says.

Facebook has accomplished this without following the general consensus when it comes to advertising. Like Google, Facebook is an engineering-driven culture — there’s a passionate focus on user experience, even if it flies in the face of financial interests. (For example, Facebook doesn’t host rich media animations, only user-originated video clips.)

And Facebook was initially viewed as a lagging behind MySpace in terms of providing what advertisers want. While MySpace offered branded skins and  home-page takeovers, Facebook offered little in the way of creative elbow room — only a few lines of text and a simple thumbnail photo. Instead, Facebook designed its ad products around how people use the site, which Murphy believes was a smart move. Ad units function the same as other content, with voting, “likes”, and other features — this enables brands to act less like gate-crashers and more like part of the entire user experience. “They’ve become more social over time,” said Murphy. “It’s our hope they get more and more social.”

Facebook has two main advertising revenue streams: self-serve ads, which are managed by advertisers and can be precisely targeted, and large brand ad campaigns, which feature inventory like fan pages that are unique to Facebook. As I discussed in April, Facebook’s popularity is unmatched — it’s on a completely different scale than its competitors:

Facebook’s utter size makes it an attractive target for brands. Here are the most recent Facebook Page statistics from AllFacebook:

Name # of Fans Daily Fan Growth Weekly Fan Growth
1. Texas Hold’em Poker 21,643,523 67,250 417,004
2. Michael Jackson 17,130,123 67,266 546,497
3. Facebook 14,378,991 118,849 886,893
4. Lady Gaga 13,803,733 99,777 812,665
5. Family Guy 13,558,268 93,189 787,430
6. Mafia Wars 13,218,905 13,286 87,360
7. Vin Diesel 12,373,394 74,869 622,419
8. Barack Obama 11,425,915 57,343 451,332
9. Starbucks 11,124,024 62,082 590,919
10. House 10,919,212 83,058 707,980
11. Megan Fox 10,378,883 58,522 503,321
12. The Twilight Saga 10,335,740 69,922 599,998
13. YouTube 9,206,129 88,488 1,118,453
14. Linkin Park 9,089,113 81,262 637,679
15. South Park 9,011,041 86,214 620,011
View More

Marketers used to view Facebook as a place to experiment. Now they’re looking at it as a place to make their home.

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