Facebook has been improving their revenue by cashing in on mobile and desktop news feed ads for awhile now. With an average Click Through Rate (NYSE:CTR) anywhere between 1% and 7%, news feed ads outperform all social media networks in terms of engagement.
However, if you wanted to run a campaign on Facebook leading directly to your website, you had to settle for desktop ads on the right hand side of the screen. These ads average only 0.03% click through rate. Although it is understandable that Facebook would prefer to advertise links to FB pages instead of websites, this limitation for direct link ads also scares off potential clients.
But now Facebook has figured out to solve the problem: Pushing Facebook pages on every advertiser who tries to run a direct link campaign.
Not only will a new Facebook page allow the advertiser to market in news feeds (where one pays higher prices for clicks and impressions), they also now have a page with no fans. How can they increase the number of fans for their page? By spending more money on Facebook advertising.
I expect that Facebook and its shareholders are in for a happy surprise when quarterly earnings are announced on October 21st, 2013. I recommended buying Facebook (NASDAQ:FB) Why Buying (FB) Before October 23rd, 2012 and the share price rose 20% on that day alone.Bottom Line
Marketers: Start spending more on Facebook ads before prices increase.
Investors: Consider purchasing (FB) before October 21st, 2013.
Disclosure: I am long FB.