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How Effective Are Facebook Ads?

Facebook ads are offering an alternative to other digital advertising and in 2010 the number of  display ads served up by Facebook  passed the 1 trillion milestone for the first time in history passing Yahoo with 529 billion ads according to recent report by Comscore.

The question is though are they as effective as the industry benchmarks? According to a recent survey by Webtrends of 11,000 Facebook campaigns Ads on Facebook performed about half as well as traditional banner ads and are cost more in 2010 than they did in 2009 as competition increases.

Webtrends accessed a large database of Facebook campaign results including.

  • 4.5 billion impressions
  • 2.2 million clicks
  • 11,200 ads

So here are some stats to digest to assist you in calculating the benefits of Facebook advertising for your organisation in comparing them to your current digital and online marketing campaigns.

1. From 2009 to 2010 the average CTR dropped from 0.063% to 0.051%

2. Cost per click increased from 27 cents to 49 cents

How Effective Are Facebook Ads

3.  The older you are the more you click until you reach 65, with 55-64 year old women having the highest click through rate (CTR) at nearly 0.06%

4. Social Brands perform better because most people are on Facebook for fun so it makes logical sense that industries such as tabloids and blogs top the list for (CTR) at 0.165% followed by

  • Media and Entertainment (0.154%)
  • E-commerce (0.89%)
  • Travel (0.86%)
  • Automotive (o.82%)
  • Nonprofits (0.77%)
  • Start ups (0.74%)
  • Cosmetics (0.072%)
  • Retailer (0.70%)
  • Restaurants (0.66%)

5. Facebook rewards social brands with cheaper prices with the lowest rate being tabloids and blogs at 12 cents per click

6. Everyone clicks more if a friend likes an ad with the CTR nearly doubling if friends are targeted

How Effective Are Facebook Ads

7. Fans that didn’t attend college click on more ads with non college at 0.043% compared to college at 0.023%

8. Social ads have a short shelf life with interest targeted ads burning out after 3-5 days (successful search ads can be run for months without any changes)

So the takeaway from this is that despite the lower click-throughs for Facebook display ads, the power of the word of mouth through friends recommendations makes Facebook ads last longer and that reveals the leverage of social media.