UNBALANCED: Facebook Captures 14% of Our Online Attention but Only 4% of Ad Spend Online

This article was published as a guest post at Business Insider, and is republished here for Digital Quarters readers.

(image via Steven Leary)

We spend more time on Facebook than anywhere else on the web.  Out of every seven minutes online, one of those minutes is spent on Facebook.  Second place Google captures only one in ten – and that’s including YouTube!

But you wouldn’t know it from looking at the way advertisers allocate their money.  Globally, advertisers spent $36 billion with Google in 2011.  They threw $4 billion at Yahoo (which captures 8% of our web time).  But for Facebook?  $3 billion and change.

Facebook garners only 4% of internet advertising spend when they’re capturing 14% of our online attention.  And the discrepancy deepens when we look at online and offline combined:  because advertisers haven’t shifted money to digital as quickly as we’ve shifted our attention, Facebook gets shortchanged even more (by 7x, to be exact) in the big picture.

What would Facebook revenues look like if brands matched ad spending to consumer attention?

(For context:  the entire US magazine industry brings in advertising revenues of $18 billion.)

The revenues in the chart above hypothecate only that Facebook gets “back to even” with other forms of advertising.  But Facebook has an asset no other brand advertising vehicle has:  a treasure trove of targeting data.  Facebook’s greatest business opportunity is to use that targeting data to sell relationships, not impressions.  And if it can do that, then it may be able to achieve even more than “average” pricing.  And it could deserve it – if it can offer relationships with consumers that are worth exponentially more than a magazine spread or a keyword ad on Google.

Larry Page, are you sweating yet?

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