Facebook just announced it has 2 million active advertisers. Rival Google, the online ad king, has about 4 million active advertisers. Facebook swiftly achieving half of Google's number is impressive. (Note: number of advertisers doesn't equate to revenue, but the 2 million demonstrates remarkable penetration.) The real secret sauce, however, that makes Facebook's strategy so impressive is that its goal is to actually show FEWER ADS.
Here's how it works: the more relevant the ads are to a user, the more Facebook can charge for them--and the fewer ads a user will have to see to become a valuable target. Facebook's voracious data collection is constantly increasing its ability to serve relevant ads. As a result, the number of ads Facebook served in the fourth quarter was actually down 65%. But the "average price per ad is up a whopping 335%," according to the business site Quartz.
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