Facebook Advertising Click Through Rate (CTR) Rose 18% During 2011

Click through rates (CTR) on Facebook ads increased by 18% from Q1 to Q4 2011 among the 5 major markets (Canada, France, Germany, UK, and the US) measured by TBG Digital, according to the company’s Q4 2011 report, released in January 2012. CTR increased by an average of 7% between Q3 and Q4 2011, bolstered by France (100% increase), but offset by Germany (18% decrease) and the US (2% decrease). In fact, France overtook all other markets in ad performance in Q4, with the US, Germany, Canada, and the UK following.

CPM Rates Also Increase

Cost per thousand impressions (CPM) rates also increased by an average of 8% between Q3 and Q4 2011 in the 5 markets analyzed, meaning that Facebook saw an increase in how much they earned per impression served in each quarter of 2011. Overall, there was an increase of 23% in CPM rates between Q1 and Q4 2011, with the US experiencing the highest rates, ahead of Canada and the UK.

According to January 2012 figures from Efficient Frontier, Facebook spend share reached 2.7% of biddable online advertising sp..., and is expected to reach 5% of all online advertising spend by the end of this year.

CPC Rises in US

Data from TBG’s “Global Facebook Advertising Report” indicates that the average Facebook ad cost per click (CPC) experienced an increase of only 1% between Q3 and Q4 2011 in the major markets, although the US saw an increase of 10%. According to TBG insight, this could point to demand increasing as more brands are advertising on Facebook and supply plateauing as US user growth slows. By contrast, the UK’s 11% decrease in CPC could indicate there is still further opportunity in that market.

Top Sectors Dominate Impressions

The top 5 sectors of the 18 measured accounted for more than two-thirds of the total impressions served in Q4 2011, led by finance (18%), which grew 50% from its 12% share in Q3. Food and drink (15%) held the second-largest share, while games and retail both commanded 13%, with entertainment (9%) following. The internet and telecom category saw an 21% rise in impressions served between Q3 and Q4, leaving it just outside the top 5.

Food and drink took the top spot among sectors in terms of CTR, with beauty and fitness and retail not far behind. Home and garden and the not for profit sectors both entered the top 5 for the first time.

Other Findings:

• Finance brands were dominant in offsite campaigns, holding a 61% stake in the total number of impressions served in the category, representing almost a 50% increase from the share they held in Q3. The finance sector also saw high CPC (200% more than the average CPC in Q4) and low CTR values (48% lower than the average CTR in Q4).
• US CPCs increased by 55.7% between November 21 and December 17.
• Keeping traffic within Facebook via Fanning and Facebook Application campaigns can reduce CPCs by 45%.

About the Data: TBG Digital’s figures are based on 214 billion impressions served in the US, UK, Canada, France, and Germany throughout 2011. Sector analysis and Fanning/Facebook Application figures are based on 78.5 billion impressions served in Q4 2011. US holiday figures based on a sample size of 5.2 billion impressions served between November 21, 2011 and January 3, 2012 in the US only.

Source: http://www.marketingcharts.com/