Ad Prices Soar As Demand Outpaces Facebook Supply

The headline in Facebook’s first-quarter earning results continues to be its surging ad demand -- which despite consumer and regulatory concerns about its use of data expanded unabated, jumping a whopping 50% year-over-year.

The subhead is that much of that expansion is coming not just from increasing supply, but from higher prices.

While Facebook’s volume of ad impressions expanded 15% during the quarter, the price per ad rose 25%.

An analysis by BMO Capital Markets’ equities research team illustrates how the supply-and-demand phenomenon for Facebook inventory has trended -- with prices expanding at more than twice the rate of impressions -- for the past 10 quarters.

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