Facebook Advertising Costs on Average About $2.30 Per Thousand Impressions?

Back in May comScore reported that Facebook served about 346,000,000,000 ads in the first quarter of 2011.

Facebook is so large that it now accounts for about one out of every three ad impressions in the U.S., according to the latest statistics from comScore Ad Metrix. In the first quarter of 2011, comScore estimates that 1.1 trillion ads were served to U.S. Internet users, and 346 billion of those (or 31 percent) were on Facebook. This percentage is up from 23 percent in the third quarter of last year.

Recently another report estimating earnings has been put forth;

Facebook now accounts for one out of three ad impressions in the U.S., and that, really, no other web property in the U.S. comes close (Yahoo was second with 10 percent). That means that Facebook served approximately 340 billion ads in the first quarter. It’s probably not a surprise, then, that advertising makes up for about 89 percent of the social network’s total revenues, which are estimated at about $1.6 billion for the first six months of 2011.

So based on those numbers, which I find hard to comprehend, Facebook revenue in 1 quarter was roughly $800,000,000 (half of 1.6 billion). And 800 million dollars divided 346 billion impressions is 0.0023 cents per impression or $2.30 per thousand impressions or CPM?

You don't have to buy advertising on Facebook by CPM, in fact, most savvy advertisers start off paying per click and then move to CPM when their ads are performing well.

I know you can theoretically get 1 cent click on Facebook, but in recent experiences with their advertising platform I have seen click prices soar to Google levels!

Not unusual to start with a bid estimate of 3,4 even 5 bucks a click.

Sure those prices will come down if you get a reasonable click through rate (CTR), but even then you'll still be paying 60, 70 cents a click, which as far as I'm aware is now good 🙁

Are we going to see ad revenues surge into the trillions in the second half of 2011? Is my math off? Have I gone insane?

Here's a lady with a very nice voice explaining some basic about the Facebook advertising platform…

 

How Advertising Works on Facebook

Ever wonder why you see certain ads on Facebook? This video explains how our ad system works to show you relevant ads without sharing any of your personal information with advertisers.

==> Original article on techcrunch

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