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Facebook ads around 84% of total revenue

Facebook Inc. published its Q2 2012 earnings report July 26, showing a 32% increase in revenue to $1.18 billion, with growth in users from 901 million to 955 million, said COO Sheryl Sandberg in the company earnings call. Sandberg says that in Q2, Facebook reported its advertising revenue at $992 million – about 84% of its total revenue as of Q2, and a 28% increase from the same quarter last year.  

Part of the boost is due to the “encouraging results” of Facebook’s expanded rollout of sponsored ads in newsfeed stories, says Sandberg, adding that that these types of advertisements perform better than ads than the site’s traditional right column ads.

“Newsfeed functions in the same way on desktop [as it does on] mobile so with the Newsfeed, marketing [is seamless],” said Sanberg, “We have partnered with Nielsen to show that in a study of over 500 ad campaigns, Facebook drives 31% more brand awareness than non-Facebook ads.” She added that “the best type of advertising is a message from a friend.”  

Facebook noted in its earnings report that it has “independent ROI data” from more than 60 ad campaigns on the platform, which show that 70% of campaigns resulted in a return on ad spend of three times or better, and 49% of campaigns showed a return on ad spend of five times or better.

Other efforts in Facebook advertising, Sandberg noted, include “rolling out new ad products, demonstrating ROI of ad spend, and making it easier for advertisers to work with us.” Getting small to medium size businesses to become comfortable with advertising on Facebook is a prime priority at present, Sandberg stated.

“Local is the holy grail of Internet advertising,” says Sandberg, admitting that getting these businesses to advertise is “difficult,” given that many small businesses lack “time and ability to adopt new technologies.”

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