Earlier this week, Borrell Associates released data suggesting that Facebook generates 74 percent of their advertising revenue through local businesses. More specifically, $229.47 million of a total advertising revenue estimate of $310.069 will come from local advertisers. How accurate is this estimate? Who knows, but considering that the company is projecting Twitter to be generating $288.061 million in ad revenue this year, there’s a good chance the numbers are way off.
Earlier this month, Alley Insider projected that Facebook’s revenue from self-service ads would be around $200 million. That’s less than the $229 million local advertising estimate provided by Borell Associates. So how did the company come up with their numbers? It appears that the company used eMarketer and Hoovers to determine these projections.
The company provides no statement as to their margin of error but considering that the company’s Twitter estimate is over-stated by over 2,800 percent, I’d guess the Facebook numbers are way off as well. This doesn’t mean that the information can’t be used to make a point however. The main point being that a large portion of Facebook’s revenue comes from local small-businesses.
Small-businesses are part of Google’s bread and butter which means that Google should at least be somewhat concerned about the Facebook threat. Whether or not local businesses will account for 74 percent of their advertising revenue, it’s a growing demographic for Facebook. As I’ve been writing for some time, Facebook presents great opportunities for businesses to take advantage of.
Any business is foolish not to develop a presence on the site.