Cost per click of U.S. Facebook ads rose 10% during Q4 2011 compared with Q3; during same period, Facebook offered an average 45% discount per click for ads that directed users to another Facebook location

Cindy Allen

LOS ANGELES , January 18, 2012 (Industry Intelligence) – According to advertising firm TBG Digital Limited, the cost-per-click of U.S. Facebook ads rose 10% during the fourth quarter of 2011 as compared to the previous quarter, Internet Retailer reported Jan. 17.

During this same period, TBG Digital found that Facebook Inc. offers an average 45% discount cost per click for ads that direct users to another location on Facebook, perhaps indicating that the social network is attempting to give advertisers an incentive to keep consumers on Facebook rather than direct them elsewhere.

From Thanksgiving to Dec. 17, the average cost per click of a Facebook ad in the U.S. rose 55.7%.

TBG reported that that Facebook charged 29% less for cost-per-click ads that directed users to another location on Facebook rather than an outside site during the second quarter.

During the fourth quarter, across all five of TBG’s markets (Canada, the United States, the United Kingdom, France and Germany), the average price of a cost-per-click Facebook ad rose by only 1%.

Across all five markets, the average cost per thousand impressions (CPM) increased 8%.

TBD reported that Facebook’s CPM rose 23% since the first quarter.

In comparison to the first quarter, click-through rates across all five markets grew 18% during the fourth quarter of 2011.

TBD said that the cost of Facebook ads is increasing because they are working, and “are connecting with their user base as they are becoming more engaging.”

TBD’s data was compiled from 266 of their clients who operate in the realms of entertainment, finance, food and drink, games and retail.

The primary source of this article is Internet Retailer, Chicago, Illinois, on Jan. 17, 2012.

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