According to the latest Global Digital Marketing Performance Report from Efficient Frontier, Facebook ad CPCs increased by 22% from Q1 to Q2.
"We predict that brands will double their Facebook fan base by October of 2011 and the cost for acquiring these fans will increase," the firm said.
"Increased presence on Facebook from advertisers continues to push up CPCs," it said. "This means that the longer brands wait to engage with consumers on Facebook, the more expensive it will become to acquire fans. Although the previous quarter’s CPC growth was 40%, we do not consider this a deceleration. The immaturity of the medium results in high volatility in the data."
Facebook Spend is incremental as budget mostly cones from offline media such as TV and print," Efficient Frontier notes. "Facebook is around 5% of Search budgets, though for some advertisers this can peak to 25% during time sensitive, offer led promotions."
In its outlook, the firm said Facebook CPCs will continue to rise at double digit pace. "Even if CPCs increase at 20% per quarter for the remainder of the year, this will still result in an 80% growth in a year. This could reasonably equate into a doubling of Facebook’s revenue from marketplace ads," it said.
Here are some interesting charts included in the report:
Of course businesses have a new social network to consider in Google+ which quickly surpassed 10 million users even in its limited field testing phase. It's rapid growth is expected to continue. Next week, Google will start letting some businesses launch brand profiles. It's still unknown at what point the option will be available to all businesses.