The Q4 Global Facebook Advertising Report, compiled by TBG Digital, has found that 45% reduction in cost per click (CPC) rates for campaigns which recruit fans or require users to install applications on Facebook, compared with those that directed traffic away.
The report, which was based on 326 billion impressions in 205 countries, found that cost per thousand impressions rates, which indicates how much Facebook earn every time an advert is shown to a user, increased by 8% on average over the quarter. This brings the total increase for 2011 to 23%, meaning that Facebook has earned substantially more during the course of the year from its advertisers.
Click through rates, the traditional method of assessing the effectiveness of adverts, also increased by 18% over the year.
Simon Mansell, CEO of TBG Digital, said: “Users are increasingly discerning about what they view on social media networks, so it is in all advertisers’ interests to ensure that their content resonates with their target audiences and fits with their usage habits.
“The potential cost savings available by maintaining traffic within the Facebook environment is particularly compelling and demonstrates its effectiveness as an advertising channel and also as a ‘destination’, with more and more clients investing heavily into their Facebook presence With the reported introduction of mobile adverts early this year, the opportunities for advertisers will continue to grow and Facebook is cementing its position as an increasingly essential part of major brands’ advertising strategies.”
It was found that the top five sectors ¬ ranked by volume - finance, retail, food and drink, games and entertainment - accounted for almost 68% of the total impressions served on Facebook. Food and drink took over from beauty and fitness as the top sector for click through rates on Facebook, while finance increased its share of impressions off-site.