August 10, 2010

Booming ad sales for Facebook from massive user growth and time in market

Facebook's massive user growth in combination with the fact that its advertising sales teams have been in the market for another year or two, has led to a massive increase in spend by advertisers, according to Facebook's COO Sheryl Sandberg.

This is a central aspect when trying to understand the growth of an advertising-driven startup: it takes time to build an advertising sales businesses.

First the company needs to have a site with a fair number of visitors. The absolute number required depends on country, vertical and other factors.

Then the company needs to hire good salespeople, have them meet with advertisers (at the right time in the advertisers' planning/buying cycles), get some initial test orders, prove that the specific online media performs and get the first repeat orders. At the same time, the company needs to hire more salespeople to increase the number of agencies and clients it meets to get more test orders and start more customer relationships.

While the sales team is really getting up to speed, the site is hopefully growing and is still being considered hot among media buyers. When everything fall into place, massive growth a'la Facebook is possible.

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