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Like it or not, Facebook users can expect more ads

Date

Julian Lee

Facebook financial info

Facebook financial info

ITS GLOBAL user base is climbing inexorably towards 1 billion and next week, when it floats as a public company, Facebook is expected to be valued at a staggering $US95 billion. But to the company you are worth as little as $4.54 a year.

That's the amount of money Facebook is likely to earn in advertising revenue this year from each of its 11 million Australian users, despite the fact that Australians spend more time on the social networking site than anywhere else.

It is marginally more than the global average but less than half the amount of dollars that each American and Canadian generates for the company.

Yet analysts expect an increase in advertising after Facebook goes public next week, as the pressure mounts from shareholders to lift the average revenue per user to higher levels.

Advertisers typically use Facebook as a cheap means of getting to lots of people with simple ads that appear on the right hand side of a person's page.

John Miskelly, a director of the media buying agency MediaCom, said more and varied types of ads might appear, including handing over the entire home page to a single advertiser for the day, an increase in banner ads and more advertising messages appearing in a user's news feed, a space usually dedicated for personal posts.

He also raises the prospect that Facebook may open up the reams of data that it compiles on users to allow big spending advertisers to access it directly to serve tailored advertising to users.

At the moment advertisers do not have direct access to the data but rather they give Facebook a wish list of who they want to target, based on basic information such as age, gender and interests, and then Facebook places the ads on their behalf.

Facebook aggregates users into ''types'' based on the information they hand over but mining that information more deeply would give advertisers more and deeper knowledge about people they want to target with ads.

''Getting hold of that kind of data would be a marketer's dream. It's a goldmine. It would really improve the targeting with their other online advertising as they would be reaching the right people with their messages,'' Mr Miskelly said.

The editor of Social Media News, David Cowling, expects mobile phone users will see more ads appear on their handset screen, an area the company has yet to exploit but has flagged as an area of growth.

Mr Cowling puts the lower ad revenue per user in Australia down to the fact that to date few small businesses are using Facebook for advertising.

He said Facebook's founder, Mark Zuckerburg, who will remain a large shareholder, would resist commercialising the site too much. ''He is always focused on new products and making the site better. Generating new revenues has never really been his goal. Whether that remains the case after the IPO [float] remains to be seen.''

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