Facebook's Advertiser Base Increases 400%

According to BusinessWeek, Facebook’s advertiser base has quadrupled in the past year. While Facebook is focused on continuing to grow their user base, the company is simultaneously focused on growing the company’s advertising revenue. The largest channel of growth is through performance advertising followed by engagement ads, or large brand advertisers, many sources have estimated. The growth in advertisers is obviously being fueled by the company’s laser focus on increasing its user base.

Wide Misunderstanding About Facebook’s Data Usage

Users and even journalists appear confused about how Facebook uses the data they collect from users. Often times the information is just flat out inaccurate. I have no idea where some of these analysts get their information from, but it’s clearly not from Facebook.

Facebook Doesn’t Sell Your Data

The most significant thing that many users are misinformed about is the false assumption that Facebook sells user data to third-parties (more specifically: advertisers). No data is ever sold to advertisers and most likely never will be if Facebook stays true to their company culture.

Privacy Settings Do Not Impact Facebook’s Ability To Target Ads

BusinessWeek’s latest article quotes Debra Aho Williamson from EMarketer, stating that privacy settings will impact Facebook’s ad business. More specifically:

Companies should keep a close eye on user growth numbers in coming months, EMarketer’s Williamson said. Users might decide to hide some personal information used by advertisers to target customers, she said.

To suggest that as a result of users information private, advertisers will have less of an ability to target them is simply factually inaccurate. Advertisers purchase advertisements from Facebook based on specific criteria, such as gender, age, and interests, and Facebook in turn serves those ads to users. Advertisers are not aware of who specifically was served those advertisements.

This separation of advertisers from users enables Facebook to display ads to users whether or not their data is made private. The advertisers are provided with reports from Facebook who served up the advertisements. The advertisers never have access to any of the data.

The Distinction Between Developers And Advertisers

The most confusing distinction among privacy advocates, analysts, journalists, and users is the distinction between developers and advertisers. Developers have the ability to access data made public by users just as they have access to user information on Twitter or any other platform that provides an API (application program interface). The press often makes the following inaccurate correlation:
developer access = advertiser access
Simply put, just because a developer, such as Yelp.com, can access your data when you visit their site, that does not inherently mean that advertisers that run ads on Facebook are accessing your data. While

Advertising Growth Despite Confusion

The most impressive thing about Facebook’s ongoing growth is that the company is effectively recruiting advertisers despite the ongoing confusion within the public. Many attribute the issue to the complexity of Facebook and their privacy settings. They call on Facebook to make their privacy settings more simple. Facebook responded with new, simplified, privacy settings last week.

However there is still confusion, and unfortunately for Facebook, there most likely always will be. That’s because just like relationships, communication platforms are not a simple system. Facebook will continue to simplify the service though as users demand. More importantly though, Facebook is continuing to grow its advertiser base despite the ongoing confusion. That’s impressive.

Recommended articles