First of all, it has no advertising " killer format " comparable to Google's AdWords. Unfortunately for its investors, in many ways, Facebook is not Google. The reason why the TV ad market is holding pretty well is its lasting ability to create a tension on prices thanks to the fixed numbers of ad slots available over a given period of time. This trend is known to push ads prices further down as scarcity no longer contains them. More broadly, Facebook experiences the unlimited supply of the internet in which users create inventory much faster than advertising can fill it. This represents a reach of more than 80% of mobile users and three times that of the next social media competitor (Twitter), see below: Numbers compiled by ComScore are staggering: last March, the average American user spent 7hrs 21 minutes on mobile versions of Facebook (80% on applications, 20% on the mobile site). If Facebook can't effectively monetise its mobile users, it is in serious trouble. We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered. The next bad signal came during the roadshow, when Facebook issued a rather stern warning about its advertising performance among mobile users. But Facebook watchers saw it a major red flag. No big deal in terms of revenue: according to Advertising Age, GM had spent a mere $10m (£6.8m) in FB ads and a total $30m maintaining its presence on the social network. This was due to poor click-through performance compared to other ads vectors such as Google. The first one was General Motors' decision to pull its ads off Facebook. Based on such numbers, and on the prospect for a billion users by the end of 2012, everyone began to extrapolate and predict Facebook's dominance of the global advertising market.
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