By Nicholas KristofPosted February 06, 2018 04:20:39Facebook made the internet a better world by paying advertisers $4 billion last year.
But the tech giant has also made the job of making those ads more expensive for people, according to a new report by Bloomberg.
“There’s a lot of money to be made, but the costs are too high,” said John Biederman, a marketing professor at the University of Southern California.
“The average American spends an average of $50,000 to $70,000 a year on online ads, and that’s the amount that is being spent on these ads,” Biedermans report notes.
“When you’re dealing with millions of dollars a year, there is no question that the cost of doing business has gone up.”
Facebook CEO Mark Zuckerberg is trying to change that.
Facebook is investing more than $200 billion into its ads platform, adding new brands, adding ads that are more interactive, and making it easier for advertisers to target their ads to people who are already using the platform.
The company says it is spending $200 million a year to help advertisers reach their audience.
But it’s not all about advertising.
The platform has been criticized for failing to crack down on fake news, which critics say has contributed to the rise of misinformation on the web.
The report found that people spent $1.2 trillion on ads in 2017, up 8 percent from 2016, with more than a third of that spent on Facebook’s own ads.
Facebook’s AdSense, its advertising program that allows companies to buy ads from brands, accounted for more than one-third of the company’s ad spending.
But that’s down from the past two years, when AdSense accounted for about two-thirds of its spending.
The $200-billion figure comes from Biederstein’s analysis of data from the American advertising market research firm Kantar Media/CMAG.
It also comes from data from data provider eMarketer, which tracks the number of online ad clicks.
Biederman said the company needs to take the next step by creating a more accurate measurement of the ad spending it pays to advertisers.
He also said that the amount of money spent on ads should be factored into the number for Facebook to include in its ad budgets.
“Ads have an impact on the quality of ads, but they are not a direct cost of advertising,” Bederman said.
“It’s a cost that is paid by advertisers and the money is used to build audiences.”