Ready For IPO: Facebook Ads Rates Increased By 23% In 2011

Facebook Advertising Report LogoThere’s nothing like the smell of a nearby IPO to start examining a company ad revenue performances… With the expected public offering later on this year of the most popular social network, Facebook, it is a pretty good idea to check how Mark Zuckerberg company has performed over the past year.

And so, TBG Digital, the global marketing agency that specialized in Facebook advertising, has released a report covering the Facebook advertising state for the fourth quarter of 2011. The report has withdrawn its data from 326 billion ad impression across 205 different countries and 266 clients.

23% Yearly Ad Rates Increase

An analysis of five of Facebook’s major markets (Canada, France, Germany, UK, US) is revealing that the cost per thousand impressions (CPM) ad rates have increased by 23% throughout the year from the first quarter of 2011 to the last one. Between the third and the fourth quarter the CPM ad rates have increased by 8%.

Facebook ads CPM Rates 2011

The stats are proving that Facebook managed to allure more advertisers into the social network ad products and as a result the ad rates have jumped while advertisers competed on the advertising spots (simple supply and demand logic).

If we dig a little deeper into the busiest time of the year (the holiday season) for both social networking users and consequently advertisers, we will discover that during the period between November 21st to December 17th, the cost per clicks have increased by 55.7%!

Facebook Ads CPC Holiday Season

The report provided another interesting piece of information, discovering that advertisers received 45% ad cost reduction (!) as an incentive to keep the traffic within the social network by sending users that clicked on the ads to another Facebook page or app rather than an external site, that allows Facebook to expose the users to more ads.

Sponsored Stories May Produce Much More Revenue

The fact that the Sponsored Stories ads turned to be a real success, was very clear already at the beginning of May 2011, where another study (10 days, 3 clients, 2 billion ad impression test) of TBG Digital discovered that these kind of ads have a 46% higher click-through rate.

Facebook Sponsored Stories CTR

Last week, Facebook began rolling out Sponsored Stories ads (that renamed to “Featured”) into the News Feed of the users, the most engaged place by the social network users. It is pretty safe to assume that this move alongside other new ad products (such as the rumored mobile ads) will generate Facebook even more revenue this year…

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