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As Facebook readies itself for its IPO, currently predicted to occur in May 2012, new information about the company is beginning to trickle down. While much of it is intended to bolster Facebook’s valuation, no one can deny that its reach is vast and a projection of 1 billion users by August 2012 seems entirely plausible. Facebook ad services have received a lot of attention because of their ability to target niche demographics.
When you couple that capability with a user base that is three times the size of the U.S. population, you have to wonder what Facebook advertising can do for you, whether you are currently a customer or are still considering becoming one. For its part, according to TBG’s most recent quarterly report, Facebook is more than happy to reduce CPC (Cost Per Click) rates much as 45%, if your campaigns are directly building your presence on Facebook, either by recruiting fans or installing applications. This is a major incentive for some to invest in a CPC campaign that remains within the confines of Facebook, but others may see a considerable downside.
Sometimes it seems like Facebook is angling to swallow the internet whole. That is a troubling proposition for those who have privacy concerns about the site. Consider financial institutions that traditionally redirect their Facebook ads to their own secure sites in order for a user to complete a confidential application for a quote or sign up for services. While they may drastically decrease their advertising spend by building apps that perform those same functions within Facebook, these banks may lose the trust of their customers, which is difficult to quantify.
While this may vary across generations, there are plenty of people who are happy to divulge guilty pop culture pleasures on Facebook, but would never submit their social security number or other sensitive financial information to an app within the site. Furthermore, they would look askance at any business asking them to do so. When deciding to constrain a campaign to Facebook’s borders, it is important to recognize what you exactly you may be trading for savings.