Big Brands Respond to Value of Facebook Advertising Tools

Facebook reached record profits as evidenced in its fourth-quarter financial report, thanks in part to its investment in resources to prove its worth to advertisers. Currently, the company’s market value is at almost $150 billion, and advertisers are responding by spending even more in advertising on the social media site. New tools for marketers allow them to target users based on their in-store spending habits, increasing the value of ads on the site.

Though some companies report seeing higher returns on ads placed through Google, The Wall Street Journal says Facebook’s “creative and sometimes tumultuous efforts behind the scenes” prove it can “stand toe-to-toe” with Google as far as return on investment goes.

Facebook’s reported revenue in the fourth quarter was a record for the company, the profit having raised 14 percent. Its efforts in proving to advertisers that their money spent is worth it paid off, and big-time advertisers are singing their praise.

“They’ve clearly been working on making these ad units very productive,” home-decor retailer Wayfair CEO Niraj Shah told WSJ. Wayfair has tripled its spending in recent months on advertisements with Facebook, which now allows advertisers to target users based not only on their posts but how much they’re spending in retail stores.

Wayfair still receives a higher return on Google ads, but WSJ says Facebook is better for educating consumers about products they might want to buy in the future. Bob Buch, chief executive of social advertising company SocialWire says, “The smart brands learned to use Facebook to create demand, and Google to fulfill demand.” Both are worth the money spent — just for different reasons.

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