Facebook Ad Rates.


Facebook announced earnings yesterday and crushed it.  Then it announced it would reduce ad load on its feed thereby reducing the volume of advertising on Facebook — a good thing in most consumer/users mind — and the stock price tanked 8% after hours.  Fickle those investors.  If you ask me, the stock price should have risen. While the stock of marketers and advertisers should have been hit. Less volume means one thing. Thaaat’s right. Higher ad prices.   If the Facebook experience is improved, thanks to less and, perhaps, better ads, advertisers will pay whatever it takes to get in the feed.

This is a simple example of the law of supply and demand. All other things being equal, rates will go up. And things won’t be equal because Mr. Z is investing in the data side of the advertising house, which will make ads more predictive and effective.

Tink about it, as my Norwegian aunt would have said.