Advertising Key to Facebook Billions

You know social media has come of age when sites like Facebook start talking about revenue. Facebook board member Marc Andreessen (fondly remembered for Mosaic and Netscape) recently told Reuters that the social media site could be a $500 million business by the end of 2009, predicting “billions” in revenue in the next five years.

The number of Facebook users, or “fans,” (as opposed to MySpace “friends”) is even more impressive than revenue at the moment. There are over 200 million users worldwide and 72 million in the U.S. More than 100 million users log on to Facebook at least once daily.

That large of an audience has been attracting more corporate dollars. Dell targets small business owners via Facebook with a series of social media guides that can be downloaded by Dell fans. Starbucks is using Facebook to promote its RED loyalty card to 2.5 million fans (RED is the campaign created by Bono to fight AIDS in Africa. Numerous companies offer a RED-related product). WDFM reports that over 11,000 customers worldwide have purchased almost 91,000 RED cards so far.

“If they pushed the throttle forward on monetization they would be doing more than a billion this year,” said Andreessen in the interview in the Reuters. “There’s every reason to expect, in my view, that the thing can be doing billions in revenue five years from now.”

Along with with corporate adoption Facebook’s growth has led to a shift in its demographics.  The most interesting statistic may be this one: According to Facebook, the fastest growing demographic is those 35 years old and older.

The latest Facebook demographics from iStrategy Labs show users age 55 and older have grown at a rate that exceeds 500% in the last six months alone. The 18-24 age group now makes up just 25 percent of U.S. users, down from 41 percent at the beginning of 2009. Simply put, Facebook users are aging.

The trend to older Facebook users could turn the site into a new and important avenue for businesses to reach the moneyed boomer demographic. Not surprisingly, businesses targeted this demographic are adding Facebook to their media plans. Ben & Jerry’s, the ice cream company started by a couple of hippie boomers, currently has close to a million Facebook fans, according to Web Digest For Marketers (WDFM). The Ben & Jerry’s Facebook page offers fans a way to send a virtual gift of ice cream – an application that has over 23,000 monthly active users, says WDFM.

Facebook just unveiled the “fan box,” which allows companies to promote Facebook on their corporate sites, encouraging visitors to sign up as fans. Clearly, Facebook sees the value of its site in a business marketing context.

With the potential for billions in revenue, Facebook and its social media brethren represent more than just fun ways to interact with friends. These sites are becoming increasingly a critical part of the marketing strategy for those businesses interested in engaging and interacting with consumers – and building revenue-related relationships with them.