Facebook is at the top of the list of websites that serve the most ads, but the results businesses are getting from those ads are disappointing. A new report from Webtrends reveals that in 2010, the click-through rate for ads on Facebook was just 0.051%, which is down from 0.063% in 2009.
Fortunately for advertisers, the price of Facebook ads is still low relative to other online advertising opportunities. In 2010, Facebook CPMs had risen to $0.25 from $0.17 in 2009 when click-through rates were slightly better.
The Webtrends study also reported that only two ad categories performed above the 0.1% click-through rate in 2010 — tabloids and blogs at 0.165% and media and entertainment at 0.154%. Coming in last was the health care ad category with a click-through rate of 0.011% and a cost-per-click that averaged $1.27.
Considering that eMarketer has estimated that advertising on Facebook in 2011 will reach $2.19 billion in the United States and $4.05 billion globally, advertisers don’t seem to be overly concerned with the lackluster click-through rates.
Keep in mind, these statistics are about advertising on Facebook (i.e., those ads that appear on the right side of your screen when you’re logged into your Facebook account), not social media marketing and content marketing via Facebook profiles, pages, groups, and other activities.
I spoke at a conference about branding and social media to an audience of small business owners recently, and during that conference, I had the opportunity to speak with author and Google AdWords expert Perry Marshall about the difference between Google AdWords advertising for businesses of all sizes and Facebook advertising. He made an interesting analogy that summed it up quite well. Perry said that Google AdWords is like the Yellow Pages and Facebook is like the neighborhood coffee shop. If advertisers look at the audiences for both Google AdWords and Facebook as well as the behaviors and demographics related to usage and expectations, they’d have better success at placing and creating ads to boost return on investment.
Perry’s company offers a handy quiz on IsFacebookForMe.com that helps brands evaluate their business, customers, and competition to determine if Facebook is an effective place to advertise. Take the quiz and see what it tells you about your brand. It might help you strategize how Facebook advertising should (or should not) fit into your overall marketing plan.
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