Facebook's advertising growth slumps to third of 2011's level, finds report
Washington, June 28 (ANI): Social networking giant Facebook's U.S. advertising growth has slowed down to a third of what it was in 2011, a new report has revealed.
According to a report by the International Data Corporation (IDC), after growing at impressive rates in the 60 percent range during the first three quarters of 2011, Facebook's advertising growth fell by more than half to 30 percent in the fourth quarter, and during the first part of 2012, the growth rate went down to 21.2 percent.
"They're still growing, but they're not growing as fast as they should," the Los Angeles Times quoted report author Karsten Weide, the program vice president of media and entertainment at IDC, as saying.
Weide cited two main reasons for the social media giant's declining growth.
He said the first is that unlike Google with search advertising, Facebook did not create its own segment, and rather, the Menlo Park company entered the display advertising market that was already populated by other players.
This, in turn, limited Facebook simply because there isn't too much more room to grow in this market the way there was for Google with search ads.
"They're just bumping into the ceiling of where they can grow," Weide said.
He cited the other major reason of Facebook's slow growth as more advertisers are realizing that display ads on the social network of more than 900 million people are simply not that effective.
"The effectiveness of advertising on Facebook is just really terrible," he said. "Advertisers are realizing that Facebook isn't as effective as they first thought. They're pulling their money and taking it elsewhere," he pointed out. (ANI)
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