While greedy advertisers claim they’re skeptical about Facebook because it won’t give them obtrusive ad units, investors seem quite confident in its business, considering they’ve publicly poured $915 million into Facebook Preferred Marketing Developers according to a study by AlphaBoost. The future of Facebook ads is a particularly popular bet, as Ads API providers who help brands and agencies buy huge campaigns have pulled in $450 million in public investments.
Those backing companies that make Facebook apps, analytics dashboard, ad managers, and publishing tools include six of InvestorRank’s Top 10 Overall VC funds such as First Round Capital and Battery Ventures. Who are you going to trust as to the potential of Facebook’s business? Advertisers who want big flashy ads all over your news feed but are sore they can’t get them. Or today’s top VCs?
Page management has also been a huge area of investment, as VCs understand that big companies need helping managing their social media presence. Some big recent rounds in this area include Buddy Media’s $54 million Series B, Vitrue’s $17 million Series C, Wildfire’s $10 million Series B, and thisMoment‘s $7.3 million Series A.
What many advertisers and the public don’t seem to get is that Facebook and its CEO Mark Zuckerberg want to become an institution. Zuckerberg even told ABC News this week that “we try to keep very focused on the long term… We’ll be judged by how good the things are that we build and whether people like them.” It’s already offering more radical ad units like the logout page ads. Facebook will need to court advertisers, but should do so through ways that increase advertising ROI without being disruptive to the utility the site provides.
Facebook could make a ton of cash now by selling out the user experience and plastering huge “creative” ad campaigns all over the site, but that would piss off users. Instead, Facebook has been wisely conservative in the options it gives advertisers. It knows it’s better to make $1 billion a quarter for five years, than $2 billion a quarter for two years and lose its user base.
Here’s the infographic from new Facebook Marketing company AlphaBoost‘s extensive research: