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Facebook Ad Performance For Q2, CPCs Up 22%

on . Posted in Online Advertising & SEO

facebook_logoAccording to a report from performance marketing company, Efficient Frontier and their subsidiary, Context Optional, Facebook’s cost-per-click (CPC) increased 22 percent in the second quarter of 2011 from first-quarter statistics. The report, Global Digital Marketing Performance Report, also projected an 80 percent increase for Facebook CPCs by the years end. This is true if Facebook continues to show at least a 20 percent rise in each quarter for the continuing year. The findings of the report are congruent with Facebook’s history of strong revenue growth and rapid expansion.

However, Facebook’s 22 percent increase is down from the 40 percent growth shown in the first quarter. Nevertheless, the report explains that not too much should be read into the drop given the nature of the social media ad category.

The report also noted the increased presence of advertisers on Facebook, and the resulting up swing of CPCs. This results in higher prices for brands the longer they wait to engage customers via Facebook. With brand centric data, the report stated that brands currently gaining fans on Facebook are on course to double their fan base by October 2011. This estimate is based on patterns seen since October 2010.

In terms of consumer engagement, using data taken from Context Optional, including a sample of more than 20million fans, the data showed that due to the high level of consumer choice, brands face an increasingly competitive environment. On average, there are 100 wall posts per brand page. This can create a viral effect, as more fans mean more communication and in turn, more brand circulation. Within the study, it was seen that for every 17,000 fans create one more comment per post.

In relation to business ad spending, Facebook accounts for around 5 percent of search overall. However, the report quickly noted that so-called “outlier” brands could see that percentage jump to nearly 25 percent, depending on several aspects such as promotions and seasonality. This essentially shows that Facebook’s spending is steady and constant, and most of its budget is taken from forms of traditional media such as print.

Facebook’s ad revenue is also increasing due to search from businesses advertising special deals. Some major companies solely advertise on Facebook, increasing this view. According to, eMarketer, a market research firm, projected yearly ad revenue for Facebook will hit $2.2 billion USD, which is a 55 percent increase from 2010.