Personal Finance

Facebook, Inc. Is Attracting New Advertisers in Droves


While Facebook 's(NASDAQ: FB) soaring revenue and profit may get all the attention every time the social network reports quarterly results, there's another area investors should be paying attention to: Facebook's staggering growth in its active advertiser count.


Image source: Instagram.

Management is focusing on growing its active advertiser count on Instagram. Increasing the number of marketers using the Instagram's ad products is one of three priorities management has for boosting the platform's overall ad business, Sandberg said during the company's third-quarter earnings call. The other two priorities are capitalizing on the shift to mobile and making ads more relevant and effective.

How is Instagram attracting new advertisers? Per Sandberg's third-quarter commentary on the subject, strategies seem to boil down to helping businesses get started on Business Profiles, Instagram's recently introduced equivalent of Facebook Pages, introducing simple yet compelling ad products, and making it easy to advertise from mobile devices -- all efforts Facebook is intimately familiar with, as the same initiatives have long been under way on the core Facebook platform.

Room for growth

Going forward, there's good reason to believe Facebook's active advertisers on both Facebook and Instagram will continue to grow rapidly.

Here's why: Facebook has 60 million small business Pages. With only 4 million active advertisers on Facebook and 500,000 on Instagram, the social network clearly has a large addressable market of businesses that aren't paying for advertising but are already managing Pages. And even Instagram's recently launched Business Profiles on Instagram already amount to 1.5 million, management said, easily outpacing the company's growth in active advertisers and setting a foundation for more growth in the platform's active advertisers.

Suffice it to say this is just the beginning for active advertiser growth on both Facebook and Instagram.

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Daniel Sparks owns shares of Facebook. The Motley Fool owns shares of and recommends Facebook. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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