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A Huge Growth Market for Facebook No One's Watching

By Eric Bleeker - Updated Apr 7, 2017 at 1:23PM

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As investors in not only Facebook but also other Web companies such as Yelp and Pandora realize, it's hard making money on Web-based ads. The fact is, users have been trained to ignore advertising, and rates continue plummeting as the inventory for ads far exceeds the amount of advertisers willing to start campaigns with higher advertising dollars per impression. Online advertising is a rough industry, with only search leader Google seeming to have "figured it out."

Yet a small piece of news most investors ignored on Friday might point the way to future Facebook success. The company is running a test to allow targeting based on user IDs, emails, and phone numbers. That's important, because it helps satisfy a difficulty with display advertising: relevancy. With a new program, a variety of advertisers with large email lists could target users who they know have an interest in their product. 

To be sure, this doesn't fix Facebook's problems turning millions of eyeballs into ad dollars, but it does begin to show how they're using their massive data hoard to be something more than a basic display-advertising company. To watch Senior Technology Analyst Eric Bleeker's full thoughts, watch the following video. 

After the world's most-hyped IPO turned out to be a dud, most investors probably don't even want to think about shares of Facebook. But there are things every investor needs to know about this company. We note Facebook's new targeting in the following video, but there are a number of areas investors need to be watching. We've outlined them in our newest premium research report. There is a lot more to this company than meets the eye, so read up on whether there is anything to "like" about it today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
$306.84 (-1.14%) $-3.55
Alphabet Inc. Stock Quote
Alphabet Inc.
$2,840.03 (-0.68%) $-19.29
Pandora Media, Inc. Stock Quote
Pandora Media, Inc.
Yelp Inc. Stock Quote
Yelp Inc.
$34.35 (-1.41%) $0.49

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