Small Minneapolis company plays large role in Facebook's IPO

In Facebook's IPO, CM Photographics, a small Minneapolis wedding photography company, served as a case study of how advertising on the social network can benefit mom-and-pop businesses.

Wedding photographers, of course, want to get their ads in front of the eyeballs of as many soon-to-be brides and grooms as possible. And Facebook knows exactly who's living nearby and engaged. It's a perfect match.

From Facebook's IPO:

CM Photographics, a wedding photography business based in Minneapolis, Minnesota, used Facebook ads to reach the users it cared most about: women aged 24 to 30 living near Minneapolis who shared their relationship status on Facebook as 'engaged.' Over 12 months, CM Photographics generated a significant increase in revenue after running a $600 advertising campaign on Facebook.

Selling advertising to companies like CM is one way Facebook hopes to generate more revenue from its users. The company is already doing well, of course, with $3.7 billion in revenue last year. But the company only made a little more than $1 per user, so there's still a ton of potential for increased profits.

Facebook's effort to develop its advertising potential is both good and bad, Nicholas Thompson of the New Yorker writes:

The story encapsulates a great deal about the company. For starters, it's a bit creepy. Get engaged, get hit by ads. But it's also brilliant. Of course, the newly engaged will want wedding photographers. Facebook knows who's getting engaged, and also who's listening to pop music right now, and who read the Washington Post this morning. Your friends, and your advertisers, now know thousands and thousands of things about you that would have been private a few years ago. Some time soon, CM Photographics may adjust the ad it shows you based on the kind of photography that Facebook's algorithms determine makes you look best. This is a good business.

The Minneapolis/St. Paul Business Journal reports that Chris Meyer, owner of CM Photographics, wasn't surprised to be featured in Facebook's IPO, as Facebook frequently uses his firm as an example of how small businesses can benefit from the social network.

Do Facebook users stand to gain from Facebook's IPO? Depends on how you feel about increasingly ubiquitous, but also increasing tailored, advertising. Perhaps, when you're engaged, it's nice to have Facebook drop a wedding photographer right into your lap from out of thin air. Or maybe you'd rather look for one yourself and keep your social media experience as free from ever-present ads as possible. 

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