Embracing Uncertainty

If you ask investors, they will tell you one thing that they dislike. It is inexainty. Investors always fear uncertainty. In fact, they hate uncertainty. If you ask further, everyone will give different answers but the main reason why they hate uncertainty is that they do not like losing money.

That is right. Losing money is what we as investors want to avoid. However, avoiding uncertainty is not the answer. You see, life is always full of uncertainty. Therefore, taking risks is necessary in investing no matter what your background is. Tell me what kind of assets with no uncertainty at all. One common answer is placing your money in Certificate of Deposit. (CD). The proponent of this investment claims that your money will always accrue interest no matter what happens to the economy, oil price and other things affecting stock investment. But is that so?

Let me answer your question with another question. Why do different banks give you different interest rate for your CD? Sure, it is affected partly by their money supply and demand. If a bank can take in more money than it can loan, it will generally give lower interest rate. However, do you notice that larger established banks generally give lower interest rate than say, an internet CD from e-trade? The answer is uncertainty. Big banks are less likely to fall and therefore, investors are willing to accept lower return investing in their CD. On the other hand, internet banks are more uncertain to survive ten years from now. Thus, the higher interest rate. You see, when you embrace uncertainty, you will earn a higher return on your investment. How about risk? The risk here is that when you invest in small unestablished banks, it may go bankrupt and bring your money down with it. Sure, in theory, your money is protected up to $ 100,000 from FDIC. If you loan your money to a friend, he or she will always say that they will pay your money back, no matter what. But banks are not your friend. In fact, you friends who borrow money from you, can default on their payments.

That is the risk of investing in CD. While, the risk seems remote, it always exists. On the opposite side, investors who fear accidently will probably stuff their money in the mattress, approaching little or no money. This is an extreme example but as you see, getting rid of uncertainty does not look that good here.

Embrace accidently does not mean investing your money blindly. To get a higher return, you need to embrace uncertainty and be educated to minimize your risk. In our CD investment case, what should investors do? Well, for example, you can research the trustworthiness of your bank to sites such as bankrate.com. Once you are comfortable about the status of your bank, you can then invest in CD which offers higher interest rate. A little bit of your time will earn you quite a bit. This is what I called embracing uncertainty. You accept that uncertainty is part of investing but you need to be aware of the risks that you take in any kind of investment. From there, you can weigh your risk and reward and decide which the additional risk is worth investing or not.

Similar case can be applied to stock investing. It is full of uncertainty and there is no way around it. However, by being educated in the stock market, you can minimize your risk and can earn additional return in the process.

Turnaround investing validates this concept. You can choose to invest in a well-run companies with seemingly no trouble in the horizon. Or … you can choose to invest in companies with short-term trouble and wait for them to turnaround. In these two cases, investing in turnaround companies will give you greater return. This is due to the uncertainty of investing in companies with short-term trouble. As always, you have a decision to make. Life is full of choice. Would you rather invest in CD and avoid uncertainty even? Or embracing uncertainty and reap a higher return on your investment?

Investing in Your Mental Well-Being

Hmm … where did I leave those keys? What did I come in here for? What was I going to say? Or in my case – 'you just asked me that question dad', to which I think, I do not remember getting an answer, in fact, I do not even remember asking the question.

Being mentally responsive and perceptive is something a lot of people take for granted and does not give a second thought to. Unfortunately, your memory is a precious thing that needs to be taken care of and kept 'in shape'. Believe it or not, we do not realize how valuable our memory really is until it is taken from us as we get older, or for some, when stricken with health issues.

Taking care of your mind means you will need to invest in things that keep it sharp and responsive. Believe it or not, it is as easy as having regular sleep patterns, uninterrupted rest, exercise, less stress and mental challenges. All of which, can cause a loss of mental alertness when ignored.

Investing in yourself is a foreign concept, especially for those with busy schedules and families to tend to. For example, mothers are unselfish and unwavering when it comes to their children. When a new mothers will tend to their babies while everyone else is eating. If she is lucky she will eat with the babies still in her arms or after everyone has gone to bed.

Improving your concentration and focus should be something you work at every day. If you do it consistently, it will definitely prove rewarding. Experts suggest that investing in certain food and brain fitness items will go a long way to sharpening your mind. Brain fitness is an actual term that means "the capacity of a person to meet the various cognitive demands of life."

To get your brain fit again, try:

  • Word searches
  • Crossword puzzles
  • Mind teasers
  • Sudoku
  • Scrabble
  • Taking a course in something new
  • Reading books that make you think

When I read the part about taking a course in something new, I suddenly understood why my children used to come home from school saying that their heads hurt. Learning a lot of new things is taxing and tiring, but education is an investment in their mental capacity, and should not be ignored. Teaching others is also something that keeps your mind sharp and thinking. Teaching a new college the ways of the office, walking a volunteer through what you do on a daily basis or helping your children with their math homework. All of these are good for you and should be thought of as investing in yourself.

In addition to brain exercises, physical fitness helps you maintain mental stability and focus. Studies have shown, and I have personal experiences that prove, that aerobic exercising several times a week will improve your self-esteem. Regular exercise clears your mind of everything else that was there and allows you to focus on the tasks at hand. Investing in a pair of running shoes and tackling a new and challenging sport will certainly pay off in more ways than one.

The phrase, you are what you eat, certainly applies when it comes to investing in your mental wellbeing. A deficiency in Vitamin B and Omega 3 Fatty Acids can lead to poor cognitive functions.

There are certain foods, seeds and natural health alternatives that have been linked to mental stamina. It is well worth looking into these items and investing in them. Some include:

  • Green tea
  • Dark chocolate
  • Garlic
  • Fish
  • Meat
  • Poultry
  • Eggs
  • Dairy products
  • Seeds
  • Whole grains
  • Flaxseed

Antioxidant-rich foods are not only tasty, they're also good for mental stamina. They include:

  • Fruit: black plums, blackberries, raspberries, strawberries, sweet cherries, avocado, oranges, grapefruits and grapes
  • Vegetables: dark green leafy vegetables, orange vegetables, spinach and kale

In the end, investing in your mental health will not only result in a sound mind and body, it will also make a happier you. Ralph Waldo Emerson once said, "Concentration is the secret of strength." Go ahead, invest in your mental wellness for a sharper more efficient you.

Globlization And Its Impact Of Insurance Industry In India

INTRODUCTION

The word “Fear” has only four alphabets like love but both of them have very different e meaning. Whatever man (malor female) does for the love of their families always starts with the background of fear. Generally so many times we have been asking our selves that, what will happen if we were not there, but we keep on asking rather then doing something for it. Time is precious, it never stops for any one and we are living in the world of uncertainty; the uncertainty of job, the uncertainty of money, the uncertainty of property and like this the story goes continuous for the whole life of a man.

A thriving insurance sector is of vital importance to every modern economy. Firstly because it encourages the habit of saving, secondly because it provides a safety net to rural and urban enterprises and productive individuals. And perhaps most importantly it generates long- term invisible funds for infrastructure building. The nature of the insurance business is such that the cash inflow of insurance companies is constant while the payout is deferred and contingency related.

This characteristic feature of their business makes insurance companies the biggest investors in long-gestation infrastructure development projects in all developed and aspiring nations. This is the most compelling reason why private sector (and foreign) companies, which will spread the insurance habit in the societal and consumer interest are urgently required in this vital sector of the economy. Opening up of insurance to private sector including foreign participation has resulted into various opportunities and challenges in India.

LIFE INSURANCE MARKET

The Life Insurance market in India is an underdeveloped market that was only tapped by the state owned LIC till the entry of private insurers. The penetration of life insurance products was 19 percent of the total 400 million of the insurable population. The state owned LIC sold insurance as a tax instrument, not as a product giving protection. Most customers were under- insured with no flexibility or transparency in the products. With the entry of the private insurers the rules of the game have changed.

The 12 private insurers in the life insurance market have already grabbed nearly 9 percent of the market in terms of premium income. The new business premium of the 12 private players has tripled to Rs 1000 crore in 2002- 03 over last year. Meanwhile, with regard to state owned LIC’s new premium business has fallen.

Innovative products, smart marketing and aggressive distribution. That’s the triple whammy combination that has enabled fledgling private insurance companies to sign up Indian customers faster than anyone ever expected. Indians, who have always seen life insurance as a tax saving device, are now suddenly turning to the private sector and snapping up the new innovative products on offer.

The growing popularity of the private insurers is evidenced in other ways. They are coining money in new niches that they have introduced. The state owned companies still dominate segments like endowments and money back policies. But in the annuity or pension products business, the private insurers have already wrested over 33 percent of the market. And in the popular unit-linked insurance schemes they have a virtual monopoly, with over 90 percent of the customers.

The private insurers also seem to be scoring big in other ways- they are persuading people to take out bigger policies. For instance, the average size of a life insurance policy before privatization was around Rs 50,000. That has risen to about Rs 80,000. But the private insurers are ahead in this game and the average size of their policies is around Rs 1.1 lakh to Rs 1.2 lakh- way bigger than the industry average.

Buoyed by their quicker than expected success, nearly all private insurers are fast- forwarding the second phase of their expansion plans. No doubt the aggressive stance of private insurers is already paying rich dividends. But a rejuvenated LIC is also trying to fight back to woo new customers.

INSURANCE TODAY

In 1993, Malhotra Committee, headed by former Finance Secretary and RBI Governor R. N. Malhotra, was formed to evaluate the Indian insurance industry and recommend its future direction. The Malhotra committee was set up with the objective of complementing the reforms initiated in the financial sector.

With the setup of Insurance Regulatory Development Authority (IRDA) the reforms started in the Insurance sector. It has became necessary as if we compare our Insurance penetration and per capita premium we are much behind then the rest of the world. The table above gives the statistics for the year 2000.

With the expected increase in per capita income to 6% for the next 10 year and with the improvement in the awareness levels the demand for insurance is expected to grow.

As per an independent consultancy company, Monitor Group has estimated a growth form Rs. 218 Billion to Rs. 1003 Billion by 2008. The estimations seems achievable as the performance of 13 life Insurance players in India for the year 2002-2003 (up to October, based on the first year premium) is Rs. 66.683 million being LIC the biggest contributor with Rs. 59,187 million. As of now LIC has 2050 branches in 7 zones with strong team of 5,60,000 agents.

IMPACT OF GLOBALISATION

While nationalized insurance companies have done a commendable job in extending the volume of the business, opening up insurance sector to private players was a necessity in the context of globalization of financial sector. If traditional infrastructural and semipublic goods industries such as banking, airlines, telecom, power etc., have significant private sector presence, continuing a state of monopoly in provision of insurance was indefensible and therefore, the globalization of insurance has been done as discussed earlier. Its impact has to be seen in the form of creating various opportunities and challenges.

The introduction of private players in the industry has added colours to the dull industry. The initiatives taken by the private players are very competitive and have given immense competition to the on time monopoly of the market LIC. Since the advent of the private players in the market the industry has seen new and innovative steps taken by the players in the sector. The new players have improved the service quality of the insurance. As a result LIC down the years have seen the declining in its career. The market share was distributed among the private players. Though LIC still holds 75% of the insurance sector the upcoming nature of these private players are enough to give more competition to LIC in the near future. LIC market share has decreased from 95%(2002-03) to 81% (2004-05). The following company holds the rest of the market share of the insurance industry.

TABLE – 1

IMPACT OF GLOBALISATION

NAME OF THE PLAYER MARKET SHARE (%)

LIC 82.3

ICICI PRUDENTIAL 5.63

BIRLA SUN LIFE 2.56

BAJA ALLIANZ 2.03

SBI LIFE 1.80

HDFC STANDARD 1.36

TATA AIG 1.29

MAX NEW YORK 0.90

AVIVA 0.79

OM KOTAK MAHINDRA 0.51

ING VYASA 0.37

AMP SANMAR 0.26

METLIFE 0.21

PRESENT SCENARIO OF GLOBALISATION

In a tough battle to expand market shares the private sector life insurance industry consisting of 14 life insurance companies at 26% have lost 3% of market share to the state owned Life Insurance Corporation(LIC) in the domestic life insurance industry in 2006-07. According to the figures released by Insurance Regulatory & Development Authority, the total premium of these 14 companies have shot up by 90% to Rs 19,471.83 crore in 2006-07 from Rs 10, 252 crore.

LIC with a total premium mobilisation of Rs 55,934 crore has been able to retain a market share of 74.26 % during the reporting period. In total the life insurance industry in first year premium has grown by 110% to Rs 75, 406 crore during 2006-07. The 2006-07 performance has thrown a few surprises in the ranking among the private sector life insurance companies. New entrants like Reliance Life and SBI Life had shown a huge growth of over 381% and 210% respectively during the year. Reliance Life which has become one of the top five companies ended the year with a premium of Rs 930 crore during the year.

Though ICICI Prudential Life Insurance remained as the No 1 private sector life insurance company during the year. Bajaj Allianz overtook ICICI Prudential in terms of monthly market share in March, for the first time ever. Bajaj’s market share among private players in non-single premium for March stood at 29.1% vs. ICICI Prudential’s 23.8%. Bajaj gained 4.6 percentage point market share among private sector players for FY07.

Among other private players, SBI Life and Reliance Life continued to do well, each gaining 4% market share in FY07. SBI Life’s growth was driven by increasing contribution from ULIP premiums. Another notable developments of the 2006-07 performance has been the expansion of retail markets by the life insurance comapnies. Bajaj Alliannz Life insurance has added 20 lakh policies while ICICI Prudential has expanded over 19 lakh policies during the year.

With the largest number of life insurance policies in force in the world, Insurance happens to be a mega opportunity in India. It’s a business growing at the rate of 15-20 per cent annually and presently is of the order of Rs 450 billion. Together with banking services, it adds about 7 per cent to the country’s GDP. Gross premium collection is nearly 2 per cent of GDP and funds available with LIC for investments are 8 per cent of GDP.

Yet, nearly 80 per cent of Indian population is without life insurance cover while health insurance and non-life insurance continues to be below international standards. And this part of the population is also subject to weak social security and pension systems with hardly any old age income security. This itself is an indicator that growth potential for the insurance sector is immense.

A well-developed and evolved insurance sector is needed for economic development as it provides long term funds for infrastructure development and at the same time strengthens the risk taking ability. It is estimated that over the next ten years India would require investments of the order of one trillion US dollar. The Insurance sector, to some extent, can enable investments in infrastructure development to sustain economic growth of the country.

Insurance is a federal subject in India. There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999. The insurance sector in India has become a full circle from being an open competitive market to nationalisation and back to a liberalised market again. Tracing the developments in the Indian insurance sector reveals the 360 degree turn witnessed over a period of almost two centuries.

Important milestones in the life insurance business in India

1912: The Indian Life Assurance Companies Act enacted as the first statute to regulate the life insurance business.

1928: The Indian Insurance Companies Act enacted to enable the government to collect statistical information about both life and non-life insurance businesses.

1938: Earlier legislation consolidated and amended to by the Insurance Act with the objective of protecting the interests of the insuring public.

1956: 245 Indian and foreign insurers and provident societies taken over by the central government and nationalised. LIC formed by an Act of Parliament- LIC Act 1956- with a capital contribution of Rs. 5 crore from the Government of India.

In a tough battle to expand market shares the private sector life insurance industry consisting 14 life insurance companies at 26% have lost 3% of market share to the state owned Life Insurance Corporation(LIC) in the domestic life insurance industry in 2006-07. According to the figures released by Insurance Regulatory & Development Authority the total premium these 14 companies have shot up by 90% to Rs 19,471.83 crore in 2006-07 from Rs 10, 252 crore.

LIC with a total premium mobilisation of Rs 55,934 crore has been able retain a market share of 74.26 % during the reporting period. In total the life insurance industry in first year premium has grown by 110% to Rs 75, 406 crore during 2006-07. The 2006-07 performance has thrown a few surprises in the ranking among the private sector life insurance companies. New entrants like Reliance Life and SBI Life had shown a huge growth of over 381% and 210% respectively during the year. Reliance Life which has become one of the top five companies ended the year with a premium of Rs 930 crore during the year.

Though ICICI Prudential Life Insurance remained as the No 1 private sector life insurance company during the year Bajaj Allianz overtook ICICI Prudential in terms of monthly market share in March, for the first time ever. Bajaj’s market share among private players in non-single premium for March stood at 29.1% vs. ICICI Prudential’s 23.8%. Bajaj gained 4.6 percentage point market share among private sector players for FY07.

Among other private players, SBI Life and Reliance Life continued to do well, each gaining 4% market share in FY07. SBI Life’s growth was driven by increasing contribution from ULIP premiums. Another notable development of the 2006-07 performance has been the expansion of retail markets by the life insurance companies. Bajaj Alliannz Life insurance has added 20 lakh policies while ICICI Prudential has expanded over 19 lakh policies during the year.

OPPORTUNITES

- A state monopoly has little incentive to innovative or offers a wide range of products. It can be seen by a lack of certain products from LIC’s portfolio and lack of extensive risk categorization in several GIC products such as health insurance. More competition in this business will spur firms to offer several new products and more complex and extensive risk categorization.

- It would also result in better customer services and help improve the variety and price of insurance products.

- The entry of new players would speed up the spread of both life and general insurance. Spread of insurance will be measured in terms of insurance penetration and measure of density.

- With the entry of private players, it is expected that insurance business roughly 400 billion rupees per year now, more than 20 per cent per year even leaving aside the relatively under developed sectors of health insurance, pen More importantly, it will also ensure a great mobalisation of funds that can be utilized for purpose of infrastructure development that was a factor considered for globalisation of insurance.

- More importantly, it will also ensure a great moblisation of funds that can be utilized for purpose of infrastructure development that was a factor considered for globalisation of insurance.

- With allowing of holding of equity shares by foreign company either itself or through its subsidiary company or nominee not exceeding 26% of paid up capital of Indian partners will be operated resulting into supplementing domestic savings and increasing economic progress of nation. Agreements of various ventures have already been made to be discussed later on in this paper.

- It has been estimated that insurance sector growth more than 3 times the growth of economy in India. So business or domestic firms will attempt to invest in insurance sector. Moreover, growth of insurance business in India is 13 times the growth insurance in developed countries. So it is natural, that foreign companies would be fostering a very strong desire to invest something in Indian insurance business.

- Most important not the least tremendous employment opportunities will be created in the field of insurance which is burning problem of the present day today issues.

CHALLENGES BEFORE THE INDUSTRY

New age companies have started their business as discussed earlier. Some of these companies have been able to float 3 or 4 products only and some have targeted to achieve the level of 8 or 10 products. At present, these companies are not in a position to pose any challenge to LIC and all other four companies operating in general insurance sector, but if we see the quality and standards of the products which they issued, they can certainly be a challenge in future. Because the challenge in the entire environment caused by globalisation and liberalization the industry is facing the following challenges.

- The existing insurer, LIC and GIC, have created a large group of dissatisfied customers due to the poor quality of service. Hence there will be shift of large number of customers from LIC and GIC to the private insurers.

- LIC may face problem of surrender of a large number of policies, as new insurers will woo them by offer of innovative products at lower prices.

- The corporate clients under group schemes and salary savings schemes may shift their loyalty from LIC to the private insurers.

- There is a likelihood of exit of young dynamic managers from LIC to the private insurer, as they will get higher package of remuneration.

- LIC has overstaffing and with the introduction of full computerization, a large number of the employees will be surplus. However they cannot be retrenched. Hence the operating costs of LIC will not be reduced. This will be a disadvantage in the competitive market, as the new insurers will operate with lean office and high technology to reduce the operating costs.

- GIC and its four subsidiary companies are going to face more challenges, because their management expenses are very high due to surplus staff. They can’t reduce their number due to service rules.

- Management of claims will put strain on the financial resources, GIC and its subsidiaries since it is not up the mark.

- LIC has more than to 60 products and GLC has more than 180 products in their kitty, which are outdated in the present context as they are not suitable to the changing needs of the customers. Not only that they are not competent enough to complete with the new products offered by foreign companies in the market.

- Reaching the consumer expectations on par with foreign companies such as better yield and much improved quality of service particularly in the area of settlement of claims, issue of new policies, transfer of the policies and revival of policies in the liberalized market is very difficult to LIC and GIC.

- Intense competition from new insurers in winning the consumers by multi-distribution channels, which will include agents, brokers, corporate intermediaries, bank branches, affinity groups and direct marketing through telesales and interest.

- The market very soon will be flooded by a large number of products by fairly large number of insurers operating in the Indian market. Even with limited range of products offered by LIC and GIC, the consumers are confused in the market. Their confusion will further increase in the face for large number of products in the market. The existing level of awareness of the consumers for insurance products is very low. It is so because only 62% of the Indian population is literate and less than 10% educated. Even the educated consumers are ignorant about the various products of the insurance.

- The insurers will have to face an acute problem of the redressal of the consumers, grievances for deficiency in products and services.

- Increasing awareness will bring number of legal cases filled by the consumers against insurers is likely to increase substantially in future.

- Major challenges in canalizing the growth of insurance sector are product innovation, distribution network, investment management, customer service and education.

ESSENTIALS TO MEET THE CHALLENGES

- Indian insurance industry needs the following to meet the global challenges

- Understanding the customer better will enable insurance companies to design appropriate products, determine price correctly and increase profitability.

- Selection of right type of distribution channel mix along with prudent and efficient FOS [Fleet On Street] management.

- An efficient CRM system, which would eventually create sustainable competitive advantages and build a long-lasting relationship

- Insurers must follow best investment practices and must have a strong asset management company to maximize returns.

- Insurers should increase the customer base in semi urban and rural areas, which offer a huge potential.

- Promoting health insurance and using e-broking to increase the business.

CONCLUSION

Thus, in the last on basis of above the discussion we can conclude that need for private sector entry is justifiable on the basis of enhancing the efficiency of operation, achieving greater density and insurance coverage in the country and for greater mobilization of long-term savings for long gestation infrastructure projects. In the wake of such competition it is essential for the government monopolies (LIC and GIC) that they quickly up grade their technology, restructure themselves on more efficient lines and operate as broad run enterprise. New players should not be treated as rivalries to government companies, but they can supplement in achieving the objective of growth of insurance business in India.

* Lecturer, Department of Commerce, Bharathiar University, Coimbatore-46

Email – [email protected]

** Ph.D Scholar, Department of Commerce, Bharathiar University, Coimbatore. Email – [email protected]

Complete Guide to Facebook Marketing

Unless you've been living on another planet, you would be aware of the popularity and influence of Facebook today.

Just a few short years ago, you had to encourage all your family and friends to join this social networking website (just after others convinced you to join). Nowadays, it's rare to find someone who has not gotten a Facebook account.

At last count, there were over 350 million users on Facebook and this number is continuing to grow. It overtook MySpace as the number 1 social networking website on the planet last year and is just behind Google when it comes to online traffic. You are then able to understand how important Facebook marketing has become for all websites.

It's Not A Pitch Zone

The most important thing to remember about social media is that it is not a place to blatantly and endlessly pitch your product or service. If you do this, then you will not get any favors from social media users and will get poorly ignored and even bad reviews.

What social media is used for is building relationships with potential clients. There are several ways you can go about doing this:

– you can post helpful information (links) where you help them solve a problem
– you can personally chat with them and assist them you can create content addressing the needs of users and posting it

The bottom line is that you want to be seen as genuine and helpful. This way, word can get out that you're the real deal and before you know it, people will become interested in what you have to offer in terms of products and services.

Of course, the things you share on social networking sites such as Facebook should not be the nitty gritty stuff that you have to offer. You should share helpful information in the form of teasers that will interest people enough to ask and wonder if there's more. Offering free stuff is great for getting attention too.

How To Market On Facebook

The great thing about Facebook is that from the outset, it has encouraged all users to use the website as a means of sharing information and marketing whatever they please. As a result, it has developed many ways for users to do this. You do not have to use every single one of them but a combination of them can only enhance your Facebook marketing.

Pages

This is probably the marketing tool out there on Facebook. On its website Facebook describes Pages as "a public profile that enables you to share your business and products with Facebook users." It is specifically designed for promoting a business and everything it has to offer. People can then become a fan of your page and when they do this, they let their friends know that they've become a fan of your page via their News Feed. The potential for your Page to gain a lot of popularity in a small period of time is great.

Of course, it all depends on the content you put out there for people to use. You need to give them a reason to become a fan of your Page and a reason for them to keep being one.

Events

This allows to create events to be held at a certain date and time. Depending on what type of business you are, you can create one to be held locally or internationally. It can be any one of the following:

– seminar – it should be introductory and free but you could promote a paid one too
– webinar – an online seminar and where anyone worldwide can join
– product / service launch – you may be about to launch a product or service and this is a way to gain attention

The best part about creating an event on Facebook is that it can go viral and before you know it people will be attending your event in droves.

Advertising

Finally, about a year ago, Facebook introduced an advertising service where people can put ads promoting their website or their Facebook Page and they pay per click (PPC) or impression (CPM). It works in a similar way to Google AdWords.

The best thing is that you can target your ads based on both geographical locations and social actions. For example, if you were a wedding photographer and wanted to promote your services, your ads can be set up to appear only to females between the ages of 24 and 30 and who relationship statuses indicate they are engaged.

It must be noted, however, that Facebook Advertising is still in beta mode which only means that it will only improve in the near future.

Embrace Facebook

If you wanted to market your website online, you would be absolutely nuts not to use Facebook marketing as one of your key strategies. Just be careful not to get talked up in it too much because it can become a very time consuming activity.