Google AdSense is widely considered as the best business model when it comes to targeted advertising on the internet, accounting for a significant portion of the search company’s bottom line. Thus far no other company has been able to replicate this business model successfully, however it has been learnt through sources that the world’s leading social networking website, Facebook has decided to follow a similar model in order to start their own external advertising agency.
Facebook has decided to follow this business model because they cater to a large number of internet users and therefore deal with an incredible amounts of data. With the help of this data, Facebook knows a lot about its users including what they like, what they post, what they use and much more. The social networking website will not share this data with advertisers to target its users while they are surfing on Facebook. Rather, it will share this user information so advertisers can target ads towards them when they are roaming other websites.
The social networking website is working on this business model to boost its revenues, a must for public companies. According to an estimate, this external advertising agency will help Facebook double its current proceeds. Moreover, Facebook will also be able to rise as the one and only competitor to Google’s aAdSense, which no one else has been able to do so far.
According to internet investor and entrepreneur, Chris Dixon, “An external ad network is inevitable. Google proved this model with Adsense. With an already huge base of advertisers bidding on CPCs, it is impossible for most other ad networks to compete on publisher payouts. But Facebook’s traffic is so great now that an external ad network might increase their revenues by 2x or so.”
Whereas, the Chief Privacy Officer of Facebook shared, “Everything you do and say on Facebook can be used to serve you ads. Our policy says that we can advertise services to you off of Facebook based on data we have on Facebook.”
Source: TweakTown
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