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Facebook advertising rates on the rise but engagement dwindling

20th Apr 2012
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The cost of advertising on Facebook has increased from last year but engagement with ads on the social network is declining, according to new figures.

The quarterly survey conducted by ad agency TBG Digital showed that the social network’s cost per click (CPC) prices have increased almost 25% from the last quarter with a 34% increase in US CPC costs over the past year.

The survey also showed that Facebook is earning most from Marketplace ads with the average cost-per-thousand impression increasing 41% worldwide from the previous year. The retail industry takes the highest number of impressions served, increasing its share to 23%, followed by food and drink (19%), finance (14%), entertainment (11%) and games (11%).  

However, ad engagement is dropping, particularly in the US, the research revealed. The US experienced a reduction in average click through rate (CTR) of 8% in the quarter.  The drop follow’s Facebook’s move to increase the number of ads on a page, sometime showing up to seven ads at a time, said the report.

But in a move though to challenge Twitter, the research showed that due to the success of Facebook’s ‘social readers’, the number of Facebook users clicking on news stories has risen 196% from the previous quarter.  

Simon Mansell, chief executive of TBG Digital, said: “It’s good news for Facebook. Facebook has seen an increase in pricing at the same time it has grown the number of ads per page to seven which you would naturally expect to actually deflate prices.”

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By roberthat1
26th Jul 2012 11:39

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