Advertisers’ Facebook Budget Increase 4x As They Warm To Social Ads

With the jury still out on how much revenue Facebook’s new ad formats are actually generating for the company, their effectiveness appears to be increasing for advertisers. New research from online advertising management platform Marin Software found that the introduction of these new ads has resulted in both an increase in advertiser investment and user engagement.

Advertisers are increasing investments in social ads on the site with the percentage of Facebook ad budgets in the U.S. allocated towards social ads increased from 5 per cent to 23 per cent. Marin Software predict that by December 2012, advertisers will be dedicating 50 per cent of their Facebook ad budget towards ads that will incorporate the user’s social graph, meaning a greater focus on sponsored stories over the coming months.

The engagement with international audiences has grown also with the clickthrough rate (CTR) and cost per click (CPC) increasing by 20 per cent and 26 per cent over the last 12 months. The biggest increase, however, came from cost per thousands views (CPM) which increased by 51 per cent overall during the same period, showing a significant shift towards social ads. For individual territories, the U.S. has the highest CTR (0.06 per cent) and CPM ($0.32), while Australia has the highest CPC ($0.77).

Sponsored stories are different to Facebook’s traditional ads as they are placed directly into the newsfeed to ensure they get the maximum number of views, usually they are regular stories that a friend or a page that you’re connected to has shared with you. The idea behind them is that they will be integrated seamlessly into the news feed and not disrupt the user experience so if these figures are anything to go by, it would appear that they are doing their job.