Engagement with Facebook ads in the U.S. dropped eight percent between the final quarter of 2011 and the first quarter of 2012.
Meanwhile, the average cost-per-thousand impressions for Facebook ads has increased by 41% worldwide over the past year. Cost-per-click rates have risen as well, and Facebook has become increasingly competitive with Twitter in directing readers to news sites.
This all comes from a first-quarter Facebook analysis by the advertising agency TBG Digital, which works with an extensive roster of high-profile clients including jetBlue, Heineken and Coca-Cola. For the study, Facebook measured 372 billion ad impressions in nearly 200 countries for 235 clients over the past year.
While click-through rates of ads served in the U.S. dropped over the past three months, TBG Digital CEO Simon Mansell says that’s not cause for alarm for the social networking giant.
“They’ve gone from four to seven ads on a lot of pages, so even though click-through is declining, that’s okay,” Mansell told Mashable in an interview. “If you isolate that and point to to you could say it’s a negative thing, but I think that’s a bit of a red herring.”
By hosting more ads, and with increased demand boosting the price of buying ads on the site, Mansell says, Facebook’s revenue stream is in great shape despite the dip in engagement.
Another interesting finding of TBG’s report is that Facebook has managed to become more competitive with Twitter in driving traffic to news sites. TBG found a whopping 196% increase in click-through rates for news sites, driven in part by the successful Facebook social readers of news organizations such as Yahoo, The Washington Post and The Guardian.
“Clients with social readers have started to get some traction,” Mansell says. “Before, only Zynga had really made money by building a business on top of a platform. Now the social readers and Spotify are an indication that Facebook can help more industries by plugging into the social graph.”
Do you think Facebook’s advertising business will continue to grow, or hit a plateau? Let us know in the comments.
Author: / Posted: 16-04-2012