

Facebook delivers appalling ad clickthroughs: 0.04% clickthrough - danw
http://www.reachstudents.co.uk/blog/2007/07/11/facebook-advertising-warning/

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nickb
I've been questioning the honesty and the intelligence of the people (some
second-tier VCs) who are touting and actively promoting F8 as a "great" way
for startups to acquire users.

Fact is, Facebook is only making so much money because Microsoft entered into
an agreement with them guaranteeing them profits per year. You as an
independent developer will get even crappier CTRs.

One 'organically' acquired user on your own site is worth at least 1000
Facebook app users. Don't be fooled by the numbers!

~~~
natrius
"Fact is, Facebook is only making so much money because Microsoft entered into
an agreement with them guaranteeing them profits per year. You as an
independent developer will get even crappier CTRs."

One huge reason why I suspect Facebook's click through rates are so low is
because they actually respect their users by not putting their ads in
annoying, profitable places. As an Facebook app developer, you probably have
far fewer users than Facebook, so you don't have the luxury of making up the
costs of respect with volume. If you put your ads in more annoying places than
Facebook does without being annoying enough for people to stop using your app,
you can probably make money. The Graffiti app does this on their canvas pages
with AdSense. I'd like to see their numbers.

Or you could actually do a good job of advertising instead of silly lowest
common denominator ads. As a Facebook Platform app, you have access to quite a
bit of data about your users. Use it. To do a good job of it, you'd probably
have to sell your own ads. Then you could ask yourself if each ad will
actually be useful to your users, and reject them if they're not. Whether or
not that would be a profitable endeavor is left as an exercise for the reader.

The other option is to provide a useful service to your users that results in
them paying you money. Very 20th century, I know. iLike seems to be doing a
pretty good job of it.

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ivankirigin
Do folks know about good sources of CTRs for various sites? It seems like much
of that information is gated.

If 0.04% is bad, is 0.4% bad? Surely 4% is good. And how are these rates going
to change with metrics better than unique page views?

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gyro_robo
A more technically literate user base will use Adblock.

And it's about time -- it's bizarre that start-ups are trying to get acquired
with money that ultimately comes from advertising Tide. Don't offend the
corporate sponsors.

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danw
I mentioned this to a friend of mine the other day and she simply said "What
ads on facebook?". She not a techie, doesn't use an ad blocker and logs into
facebook daily. We're all used to these ads and don't even see them anymore,
in much the same way we all channel surf or go to make a cup of tea during TV
ad breaks.

Perhaps we need a new way of delivering ads in communication apps that differs
from information & entertainment apps. Twitter, facebook, blyk and many other
face this same problem with monetisation. Whats the solution? Is it ok to
analyse what people are saying to each other and deliver text link ads inline
with the conversation. If I say "Want to go for a drink later?" to a friend on
facebook should there be a link underneath saying "Get half price drinks a
Bob's Bar"?

Any ideas?

~~~
amichail
There's nothing surprising here. Facebook users are more sophisticated than
most internet surfers and generally just ignore the ads.

Here's my proposal for getting people to look at online advertising seriously:

[http://mindrosity.blogspot.com/2007/07/how-to-get-people-
to-...](http://mindrosity.blogspot.com/2007/07/how-to-get-people-to-look-at-
online-ads.html)

~~~
run4yourlives
You can try to get people to look at ads in a different way, or you can accept
that ads aren't the best way to generate income in an over marketed world and
look for some other income source.

I think it's always safer to do the latter.

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startupper
So FB makes:

15.8x10^9(pageviews/month)x0.01x0.04/100 + 0.25x15.8x10^6 = $4x10^6 per month
on ads?

So their annual revenue is just under $50x10^6 or $50 million.

Note: this assumes one ad per page.

~~~
run4yourlives
$50 Million isn't nearly enough for 15.8 billion pageviews.

There's a lot of overhead cutting down the profits there. (Probably why
there's an IPO rumour.)

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cmars232
There's ads on Facebook?

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Harj
Advertising in general is hard to do well. Just throwing up standard "click on
our site" banner ads won't have good click through rates wherever you put them
up. We had good success with our fb flyers by keeping them topical and
interesting - it was written about here:
<http://www.trendcatching.com/2006/12/ycombinator_sta.html>

~~~
chmac
I think the key to making money on facebook is not by delivering ads but by
delivering products and services. For example, TripUp provide a service where
you can say where you're travelling and invite your friends to join you or
look for people to meet in those areas. That's a goldmine for affiliated
sales. Travel services (flights, hotels, hostels, car rental, etc). Local
knowledge (internet cafes, guidebooks, taxi services). The list goes on and
on.

Ads are an invasion of your viewing space. Smart, affiliated services are a
win-win.

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run4yourlives
I think this bears repeating: <http://news.ycombinator.com/item?id=30836>

Facebook isn't the place to make money, the same way pets.com wasn't. Anyone
that lived through the first dot-bomb should be able to see that.

