Facebook’s Cost Per Impression Rate up 41%
According to TBG Digital’s Global Facebook Advertising Report, Facebook’s average CPM, (cost per thousand impressions), is up by 41% since Q1, 2011. The study, which was validated by the University of Cambridge, also shows that Facebook saw a 192% increase in click through rates (CTR), regarding its news clients, i.e. the Washington Post, demonstrating that Twitter is no longer the only go-to source for news content via social networks.
The study, based on data from 372 billion impressions in over 190 countries for 235 clients from Q1 2011 to Q1 2012, shows that Facebook is making more profit off of marketplace ads, and that its cost per click (CPC) rate is up 23% in the top five territories since Q4, 2011. While Facebook’s new usership might have slowed, the data indicates that the social network is becoming more attractive to advertisers – though average CTR, a measure of how engaging a user finds an ad, based on creativity, targeting relevance, etc., is down 8% this quarter in the top five territories. This might have something to do with Facebook’s Sponsored Stories, with users being annoyed by their activity basically being turned into ads.
Facebook’s retail segment made up 23% of all impressions in Q1, up 10%, and the most expensive ads were in the finance segment, being 3.5 times more expensive than the cheapest ads, which fell in the food and drink segment. Finance ads prompt 91% of users to go outside of the Facebook environment to subscribe to services, out of an average of 38% for all other sectors. Cost per fan is up 43% this quarter, with brands working harder to garner more likes on their Facebook pages, a practice referred to as earned media. Facebook has likewise given advertisers incentives to stay on the site by offering reduced CPCs of up to 45%.
Simon Mansell, CEO of TBG Digital, states, “The recent Facebook Advertising Report unearthed some compelling trends as it relates to how brands are using the site to engage customers. One amazing finding is that Facebook has seen an increase in pricing at the same time when it has also grown the number of ads per page, sometimes up to seven, which you would naturally expect to actually deflate prices. Additionally, the rapid increase in CTR for news clients is promising for Facebook as it demonstrates that the platform works well for sharing news as well as gaming and photos, an offering which other social networks, such as Twitter have dominated to date.”