Cost of Facebook advertising rises 74%

The cost of advertising on Facebook has increased by up to 74% as brands increasingly divert their spend from traditional marketing, such as TV and print, to the social network.

The price of cost per click adverts on Facebook almost doubled between the second quarter of 2010 and the same quarter in 2011, while cost per thousand impressions increased by 45%, according to marketing agency TBG Digital.

Growth of brand advertising campaigns grew by 104% year on year as companies look to increase their amount of Facebook fans. The use of Sponsored Stories ads proved to be one of the most effective forms of improving campaign performance, decreasing cost per acquisition by 32%.

The report claims that retail tends to get the best click through rates, growing to 36% of total ad impressions in the second quarter of 2011. The second fastest growing sector was finance, driven by credit card campaigns.

TBG Digital used a subset of total data across 167 clients, running in 21 countries to garner its results. TBG Digital says it works with 100 of the top 500 advertisers on Facebook.

Simon Mansell, author of the report, says: “I think the numbers in this report back up the anecdotal evidence of my conversations with TBG’s customers: Facebook is the transformational platform which is making advertisers move brand budgets from the traditional areas of TV and press to online.”

Facebook’s biggest competitor for ad revenue, Google, which also launched social network Google+ earlier this month, said its average cost per click price was up 12% on the previous year for the three months to 30 June.

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