When it comes to social media and other online-based businesses, the typical gauge of success is the average number of monthly active users. A more important metric has gained more recent popularity for these websites, and that’s the active number of advertisers. Many businesses will pay in return for an attainable, actionable reach for those active users. Facebook has announced this week that it now has 2 million active users.
Given the amount of time Facebook has been offering advertising options, this is a crowning achievement, and it largely has to do with the audience it’s able to present to those potential advertisers. Google, the largest player in the digital advertising landscape, has 4 million active users, according to Macquarie. Twitter, another social platform that has millions of users and also offers advertising options, but has only 60,000 active advertisers. In 2011, Facebook had only 500,000 active advertisers, while Google still had 4 million.
Why Is This Important?
So you may be asking why is this important? While more advertisers doesn’t mean more ads, Facebook isn’t able to serve as many ads given the larger pool of advertisers. Just because Facebook can’t allow as many ads as Google, doesn’t mean they aren’t cashing in. In 2014, Facebook served 65% fewer ads, while the price per ad increased by 335%, according to Facebook’s CFO.
Also, more advertisers could mean better-targeted, more relevant ads for consumers, which would mean that the audience will be more enticed by said relevant ads. This ultimately will lead to more clicks and a better return. All in all, that would mean that the advertisers would garner more profits. Google’s ability to purchase visible advertising space has contributed a significant amount to the growth of the search engine in recent years, but with Facebook nipping at its heels, it can certainly be well on its way to becoming a force to be reckoned with.