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Facebook Eyes Big Ad Opportunity From Log-Out Ads

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Facebook is the largest social network in the world with over 850 million users. Thanks to its massive scale and high user engagement, it makes billions of dollars in advertising revenues.

Facebook has been trying to roll out optimized advertising units, which maximize the monetization potential of its large user base while not being too intrusive. It has unveiled several new ad units and has also updated its profile pages, photo viewer and rolled out the new Timeline, in order to provide value to advertisers through better ad types units. Facebook leads the social networking space and competes with players such as Google and it’s increasingly taking ad revenues away from aging giants like Yahoo and AOL.

Check out our complete analysis of Facebook

Ads: Facebook’s Lifeblood ... For Now

Last week Facebook launched a new type of ad unit called log-out ads. [1] They are quite similar to large banner ads and enable advertisers to purchase ad space on Facebook’s log-out page – which a user sees right after logging out of the network – for a day. It can currently be targeted at users in a particular country, but Facebook may offer additional targeting features based on demographic information in the coming months. Advertisers can also use videos in their log-out ads.

Facebook is currently offering log-out ads bundled with its new premium home-page ads that users can view on their news feeds. They come closest to traditional display ads that Facebook has ever rolled out. It has already signed up a few high profile clients like Bing (Microsoft) and Ford, among others.

Display and text ads currently account for around 75% of Facebook’s total value and accounted for almost 85% of its overall revenue in 2011.

We currently have a $82 billion Trefis valuation for Facebook. This is below the rumored valuation for the IPO that could reach $100 billion in the coming months.

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Notes:

  1. Facebook Sets High Asking Price for Log-Out Ads: $700K a Day, AdAge []

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