Will Facebook Inc (NASDAQ:FB) Continue Dominating Social Advertising?

July 25, 2017, 09:48 am ET, BY Simon M.- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

The online advertising space is expanding at a rapid pace and Facebook Inc (NASDAQ:FB) commands a large share of this marketplace through its social media platforms. The company’s ad revenues are generated mainly through its social media platforms Facebook and Instagram.

However, the company faces stiff competition from Alphabet Inc (NASDAQ:GOOGL), Google, which owns YouTube, and Microsoft Corporation (NASDAQ:MSFT), which owns LinkedIn. As the social advertising industry grows in leaps and bounds each year, Facebook continues to position itself as the platform of choice for most advertisers.

Facebook recently stated that it had over 5 million advertisers on its platform most of which were small businesses. The company continues to innovate by introducing new features to its Facebook platform such as the recently added Facebook Live feature, which allows users to communicate with views via a live stream.

These innovations have seen Facebook ad revenues continue to rise every quarter as more and more businesses choose to advertise through social media. The ad revenues from its Instagram platform are also growing steadily although at a slower rate than on the Facebook platform.

Facebook also acquired the instant messaging application, Whatsapp, but the company has not yet introduced advertising on this platform. However, the recent addition of the status feature in the Whatsapp application indicates that Facebook is still figuring out ways to monetize the application.

Despite the stiff competition, Facebook continues to outdo its main competitor Google in terms of social ad revenues as well as the total number of advertisers on their respective platforms. The competition between the two giants is good for digital marketers as each company tries to attract more advertisers by improving their ad platforms.

Investors in Facebook have reaped excellent results as the company pays a substantial dividend to its shareholders.

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