On Sept. 29, Facebook (Nasdaq: FB), the world's biggest social media site, upgraded its advertising platform, "Atlas," and released it for beta testing.
But exactly what is Facebook Atlas? And why does Money Morning E-commerce Director Bret Holmes say it's going to "revolutionize web advertising"?
We've got your answers…
FB Advertising: Already a $15,152 per Minute Business
Facebook's 2012 IPO was a disaster. The company lost more than half its value within six months of listing. It was priced at 107 times trailing 12-month earnings, making it pricier than 99% of all companies in the S&P 500 Index at the time.
But its rebound – evidenced when the Facebook stock price more than doubled from July through September 2013 – stemmed from advertising.
"Facebook has gotten really good at advertising. It's inexpensive and it's smartly done," Holmes said. "When Google first started, it wasn't good at advertising, and look at them now."
You see, social media companies are legitimate advertising websites, like Yahoo! Inc. (Nasdaq: YHOO) and Google Inc. (Nasdaq: GOOG, GOOGL). And once FB figured out how to monetize its whopping 1.3 billion monthly active users via advertising, it was a game changer.
Now, more than 1 million advertisers are delivering content through Facebook. The company rakes in more than $1 billion a quarter in ad revenue. Annual revenue by year increased from $5.09 billion in 2012 to $7.8 billion in 2013. According to Gizmodo data from earlier this year, FB makes about $15,152 in revenue every 60 seconds, with $2,887 of that coming in as profit.
The amazing thing is, that's nothing compared to what's going to happen when Facebook launches its revamped Atlas.
"The changes to Atlas are going to make Facebook an absolute juggernaut," Holmes said. "How I know that is because every advertiser's first pick, from a return on interest (ROI) standpoint, is Facebook, with its people-based platform and huge user base. Every single one."
Here's why…
Facebook Atlas Knows You Best
Facebook Atlas is going to revolutionize Web advertising for one simple reason: The way people use Facebook inherently gives it an edge.
"Users have a much different relationship with Facebook. FB functions like a family – it knows a lot about you, you're constantly interacting," Holmes said. "Google is more like your neighborhood – it's there when you need it, but you don't need it every day."
The new Atlas capitalizes on the personal nature of FB's site. It delivers people-based marketing instead of content-based marketing.
That makes a big difference in terms of an ad's effectiveness.
Nice