Facebook has a massive ad opportunity in front of them – the local ad market.
The case for the local ad market
Facebook has unique assets to take advantage of the local market:
- Mobile presence: FB is present on 100M mobile phones, or 25% of their user base, of which 50% are daily actives, and are heavily rumored to release a location aware component in the next few weeks which would be a great place to display local ads.
- SMB engagement: They have 300M entity pages of which a significant portion are either local business like restaurants, national/local entities like Target or Walmart, movies and films, bands and concerts, etc.
- User/SMB relationships: The average FB user is connected to 60 entities, of which a big chunk are local. This figure predates the most recent profile changes which linked all Facebook profile elements to pages and therefore is most likely an underestimate.
- Advertiser base: Already spending hundreds of millions on Facebook, large advertisers and agencies have relationships are familiar the FB ad platform and the demand fulfillment nature of the cpc model that has succeeded thus far. The same is true for SMBs.
The nuances of the display ad market
With these four components, Facebook is able to attract national/local advertisers with precise targeting and mobile presence across a large number of consistently, high quality impressions in local environments – a powerful and lucrative combination.