Facebook Advertising Continues to Thrive as CPM Increases by 58% Year on Year

LONDON and SAN FRANCISCO, July 18, 2012 /PRNewswire/ --

Facebook's average Cost per Thousand impressions (CPM), an indicator of what Facebook earns per ad served, has increased by a significant 58% over the last 12 months, since Q2 in 2011, according to the latest Global Facebook Advertising Report compiled by TBG Digital and verified by the University of Cambridge. This is the latest report examining the trends and changes in the performance of Facebook campaigns managed by TBG Digital, which for the first time, now includes actual values for costs and performance metrics.

The study which was based on 406 billion impressions in more than 190 countries for 276 clients from Q2 2011 to Q2 2012 demonstrates that Facebook is not only earning more from advertising, but that ad engagement has reversed its downward trend. The increase in CPM of 58% can be attributed to a greater use of Sponsored Stories as well as the introduction of the highly anticipated mobile ads which also provide Facebook with higher earnings. Ad engagement, which is measured by  Click Through Rate (CTR) increased by 11% and again seems to have been helped, in part, by the introduction of Facebook's new mobile ads.

Cost per Click (CPC), the cost paid by advertisers to Facebook, has hit the dollar mark for the first time in the US and Canada, which saw a rise of 13% and 12% respectively.  Although European countries, UK, France and Germany, saw a reduction in CPC, where the UK fell 2% to $0.91.

The success of Facebook's new mobile ads is shown in a  study by TBG Digital of 278 million sponsored story impressions found Mobile ads received Click Through Rates 14 times that of 'Desktop' ads, on average. Mobile ads also provide great earning potential for Facebook which received $9.86 for every thousand mobile ads served (CPM), 13 times more than it received for 'Desktop' ads.  

Additional findings from the Q2 report include the following: http://clearslide.com/view/mail?iID=A8GU559Z78B9DX9V4Q8A

Sponsored Stories Continue to Perform Better Than Standard Facebook Ads

Updating a previous study by TBG Digital, analysis of 13.8 billion impressions in Q1 and Q2 2012 shows Sponsored Story ads receiving 53% higher Click Through Rates than standard ads. Cost per Fan also saw major improvements with 39% savings.  The study compared ads that provided the same function for advertisers, Page Likes.

Increases in global ad costs slow to 9%

Q2 2012 saw a slowdown in Cost per Click growth at 9%, compared to a much higher increase in Q1 2012 of 23%.  Only the United States and Canada have risen in the five major territories reported on in this section.  Both countries have CPCs of over $1 for the first time with the United States increasing by 13% to $1.04 and Canada increasing by 12% to $1.02.  

Click Through Rate By Sector Sees Shakeup in Rankings

Entertainment has dropped three places since Q1 2012 to make room for Health, Pets & Animals and Not for Profit.  Health is a regular in the top five but Not for Profit has jumped four places and Pets & Animals is a new entry.  

Jobs & Education Sector Now Generates Highest Cost per Click

Jobs & Education has jumped four places to hit the top spot with an average CPC of $1.42, pushing Finance and Retail both down one place.   Games and Computers & Electronics have switched places taking position 4 and 5 respectively.

Simon Mansell, CEO of TBG Digital, commented: "All eyes are on Facebook at the moment and a key part of its progress is the performance of its sponsored stories and mobile ads, which in particular are showing great potential for all parties."

About TBG Digital

TBG Digital (@tbgdigital) is a Social Media specialist that helps global brands advertise and engage through Facebook and Twitter. The business creates custom social experiences that are amplified through targeted media.  Activity is supported by bespoke technology and benchmarked against a data store of over one trillion events. Founded in 2001, TBG Digital has offices in San Francisco, London, New York, Paris, Chicago, Hamburg, Atlanta, Amsterdam, Manila and Sydney. For more information, please visit our website at http://www.tbgdigital.com.

SOURCE TBG Digital