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BizReport : Social Marketing : May 14, 2012

Forecast: Social ads to push 50% ad budgets by year's end?

In light of Facebook's expected IPO later this week, so industry insiders are pontificating on what could be next for The Social Network - and other social networks - as more consumers becoming connected to and continue relying on social media for information. According to one report social advertising could account for about half of Facebook ad budgets by the end of 2012, which should how much businesses are relying on social strength.

by Kristina Knight

According to Marin Software by the end of 2012 half of Facebook ad budgets will be directed to social ads - or those taking into account the social profile, likes/dislikes and other information found in Facebook users' profiles. Why the increase?

Over the past 12 months, Marin Software has seen CPCs for social ads increase more than 80% while the CPC of Marketplace ads has decreased 15%. They also note Facebook's ability to serve ads based on relevance.

As for the future of Facebook, two industry experts believe advertising will be a part of Facebook's future - because Facebook is where more consumers are connecting.

"With the IPO, you're going to see Facebook start innovating faster. I think some of things they're testing right now with Credits will move and mature much more quickly," said Christian Taylor, CEO, Payvment. "I don't think [Mark Zuckerberg] wants to take over the entire web. What he's doing is making everything on the web much more social. They don't want to be the product that everyone interacts with. They want to be the social pipes that the internet sits on top of."

"Facebook should look to provide more tools to better measure the impact of social marketing on business objectives, and further refine advertisers' targeting capabilities," said Victoria Random, CEO, Wildfire. "When it comes to ads, the real potential for Facebook is word of mouth at scale. We ultimately see Facebook allowing us to engage in a more precise fashion, and the recent post-targeting announcement is a step in this direction. Right now brands can do ads, and they can sponsor content that resonates for greater reach. But they need the ability to support segmentation of the fan base. There is a great opportunity for Facebook to allow us to build social profiles based on interests."

Tags: Facebook ads, Facebook IPO, Facebook trends, Marin Software, Payvment, social marketing, Wildfire

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