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What's Up With Facebook's Ad Model?

Ahead of Facebook’s IPO, analysts are taking issue with the company’s ad strategy, or lack thereof. “The world’s biggest social network will complete its initial public offering in a few days, with a valuation based largely on its strong history of innovation,” Forrester’s Nate Elliot writes in a blog post, this week. “But,” on behalf fellow Forrester analyst Melissa Parrish, Elliot adds: “We have to wonder: Will Facebook ever focus any of that innovation on helping marketers?”

Not that the social network hasn’t experimented in advertising. It’s done everything from charge marketers to host branded pages to blanket pages with banners from MSN’s ad network. Alas, as Elliot explains: “As good as Facebook has been at evolving to serve consumers, that’s how bad it’s been at serving marketers.”

Moreover: “Somehow Facebook still hasn’t stumbled upon a model that’s proven consistently successful for marketers, or that brings in the massive revenues to match the site’s massive user base.” As a result, made less than $4 in ad revenue per active user in 2011.




Read the whole story at Forrester »

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