Facebook Credits Needs More Work

According to the financial results from this year’s first quarter, Facebook revenue from advertising is on the decline. There are two points in particular to support this: Facebook advertising revenue is declining, and the Facebook Credit system dropped a little in the first quarter.

Facebook continues to make a lot of use of demographic data to sell advertising credits. What this means is that adveertisers are given information about the age, location, and general type of person who will be viewing the advert. This is considered to be the old-fashioned way, particularly for an internet-based company.

Take a look at how Google do it instead. Google can produce facts and figures showing almost exactly how many people are searching for a particular phrase or keyword, and they can also show how the trend fluctuates over a period of time.

None of this is available from within Facebook, and this is something they need to do some work on.

Ad placement and ad size are other aspects in whish Facebook advertising is criticised, they do not display the ads prominently enough, or large enough.

Considering the size of Facebook (900 million registered users), it is expected that they will change some campaigns and launch some new ideas in the near future.

Here is a quote from an interesting article on the sublect:

Facebook updated its IPO prospectus yesterday with the company’s financial results from the first quarter of this year.

Here’s what the new information makes clear: Facebook hasn’t yet figured out how it’s going to make money when it grows up.