Facebook Pages: Businesses Know Who’s Walking Past Their Stores

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Facebook (FB) is always thinking of new ways to improve its relationship with businesses. So far, 45 million small and medium sized businesses have set up Facebook Pages on the website, and 2.5 million of those are active advertisers on FB.

new-facebook-stock-fb-1-logo-185Meanwhile, Facebook stock investors have become more and more reliant on advertising revenue as FB’s payments business continues to shrink.

Facebook’s latest development to increase ad revenue is to provide anonymized demographic data to Facebook Page owners about the foot traffic passing by their retail locations. Facebook is also offering the ability to target ads toward users that are nearby.

Alphabet’s (GOOG, GOOGL) Google has been providing location-based advertising since 2010, so it’s about time FB caught up. The new ad tech could help the social network take share of that display ad market.

Facebook Stock Owners Need Higher Ad Prices

Facebook’s ad buying system is unique compared to Google’s. On Google, the highest bidder for an ad ends up paying the bid of the second highest bidder. This bidding process opens the door for businesses to try to game the system.

Comparatively, Facebook’s bidding system encourages Facebook Page owners to bid the true value of their FB ad by placing stories in the News Feed based on the value they provide compared to other organic News Feed items. This system has benefited Facebook stock owners greatly as FB continues to roll out new features that increase the value of ads.

The new insights about foot traffic and nearby users certainly serve to increase the value of advertising on Facebook. Facebook Pages can see all sorts of demographic information about the people that hang out near their stores and use that data to target their ads more effectively. (That data can also help owners manage their businesses, too.)

Additionally, advertising based on location via GPS is naturally more valuable than targeting users that just say they live in New York.

Should Facebook Stock Owners Have Privacy Concerns?

With Facebook collecting all of this data and providing it to businesses, it sets off some privacy alarms for users. Surely, users could turn off the location sharing features in Facebook, and that would put a damper on Facebook’s ability to provide insights to Facebook Pages. However, the vast majority of FB users likely won’t act — the typical response to Facebook’s privacy policy changes in the past.

Facebook users have seen several major updates to the company’s privacy policy that have caused users to freak out. Not once has FB seen a decline in active users from changes in its privacy policy. That’s not to say users’ privacy concerns are unfounded; it’s more of a testament to the strength of Facebook’s product.

No matter how concerned users become about the data Facebook is gathering on them, they keep coming back to connect with friends and check their News Feeds. There’s no better product for doing those things because only Facebook has a network of 1.55 billion people around the world.

That makes Facebook stock a particularly strong investment, allowing management to push its advertising business with updates like this one.

As of this writing, Adam Levy did not hold a position in any of the aforementioned securities.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/11/facebook-stock-facebook-pages-local-insight/.

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