eMarketer lowers estimated sales of Facebook for this year
San Francisco, CA, United States (4E) – Marketing research website eMarketer first estimated Facebook’s sales to reach a little more than 6 billion by the end of this year. However with the social media giant’s recent struggles, eMarketer has lowered its estimation to $5.04 billion. Last year, Facebook made huge strides by posting an 88 percent increase in revenue and 68 percent gain in advertising.
EMarketer reasoned that the lowered estimation is attributed to how Facebook handles its advertisements. It isn’t clear yet if the ads posted on Facebook are performing well. Facebook has more than 950 million users but advertisement performance is still unclear and undefined.
Facebook’s plan to launch a mobile-ad service will positively impact its advertisement business next year. The major change will positively help the company’s dropping share price.
According to eMarketer analysts Debra Aho Williamson, “Major marketers are still questioning the effectiveness of advertising on Facebook, and they are concerned that their ability to measure results is underdeveloped. Facebook is working on addressing these concerns, but it must move even more quickly.”
The main problem lies in Facebook’s control over its ad service.
EMarketer adds that, “the technology underlying the Facebook Marketplace automated ad-buying platform is robust and will continue to support higher levels of spending. The infrastructure supporting these ads, which typically appear on the right side of the page, is efficient and effective.”
Three years ago advertising made up 98 percent of Facebook’s revenue. This year, according to eMarketer, Facebook’s advertising will only account for 84 percent of total revenue.