Cost of Facebook ads rises 74%

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Facebook's Mark ZuckerbergBig brand advertising spend is moving significantly towards Facebook and away from television and print according to two recent reports. That means the cost per click of an ad on Facebook has risen 74%, more than enough to put a smile on the face of company founder Mark Zuckerberg (right).

"This is the biggest growth we've seen since Google," said Simon Mansell, chief executive of TBG Digital, the social media marketing firm which conducted one of the reports. Another firm, Efficient Frontier, found a 22% increase in cost-per-click ads from the first to second quarters.

Big brands

The most noticeable trend in all the research is that big food and drink, retail entertainment and motoring brands are diverting funds from more established media into social media. Traditionally, big brands and corporations have been wary of committing significant ad spend to new media.

TBG also found the price of display ads on Facebook, charged per thousand pages seen, rose 45% year-on-year across the UK, US, France and Germany. Their report analysed 200bn page impressions from 167 clients in the three months to June.

Efficient Frontier's analysis leads them to predict that Facebook ad spend will grow 80% year-on-year and the network is widely expected to take the number one slot in display ad sales, racking up a likely total of $2.2bn. Facebook recently set up a 'client council' of advertising and agency executives to advise it and provide feedback on its advertising strategy.

Ad space

Demand for advertising on Facebook is growing faster than the supply of ad space on the site, further underlining the fact that Facebook is now a mainstream ad channel rather than a edgy newcomer. But this presents a new set of challenges.

All the brands eyeing Facebook ads and all the ad agencies buying into social media specialists need to understand that the shift is not just about moving ads from one channel to another. Just as the media is finding it must talk with rather than at people, so advertisers need to embrace the concept of engagement.

The network's vice-president of global marketing solutions, Carolyn Everson, told ad industry luminaries as much in Cannes last month. "Facebook is one of the most incredible platforms for creativity out there," she said, "I don't want you just to think of it as a display ad."

Measurement

She went on to say that that "measurement has to go beyond the click... We need to be measuring brand affinity, awareness, intent to purchase". And, as Facebook becomes mainstream, firms need to understand that just being on it does not give them the edge it once might have.

Earlier this year we reported how many of the FTSE 100 firms were failing to utilise social media properly (see link below). And there does need to be a change in mindset for many advertisers to make best use off social. But there also needs to be progress in the way the effectiveness of social campaigns are measured, because every successful business needs solid ROI figures.

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