With Facebook ads increasing in popularity, it’s not surprising to hear that the prices have increased 40 percent per click during the past quarter. So does this mean revenue is on track to more than double this year?
If so, Facebook would post growth numbers that are comparable with Google during its early years. While we’re not sure whether or not the company will reach $4 billion in revenue this year, the price of ads are most definitely a great indicator and advertisers rush to bid on targeted ad inventory.
Efficient Frontier has told Bloomberg News’ Brian Womack that this is an overall increase, but we’re sure that fluctuation in ad rates vary from one demographic group to the next. If Facebook can pull off a massive growth year, the extremely high valuations currently placed on the company by private markets like SecondShares and SecondMarket may not be that outrageous.
For now there are only a few key indicators that can be used to project Facebook’s revenue growth and ad prices are one of the most important ones.
Readers, what do you think about the reported increase in Facebook’s ad prices?