Facebook Online Advertising Cuts into Google’s Lead
Interesting article from Spetnik Solutions about Facebook’s low click through rate:
Although Facebook’s advertising performance declined last year, marketers are increasingly investing in advertising on the site, according to market research firm Webtrends. 
The firm’s research on online advertising showed that, in 2009, the average click-through rate on Facebook ads was .063 percent, and advertisements cost 27 cents per click. In 2010, click-through rate dropped to .051 percent, while the cost jumped to 49 cents. In comparison, the industry standard for an effective online advertisement is .1 percent, more than twice Facebook’s average.
However, the Webtrends report contends that these issues are common for display ad networks and social advertising. Because of this, many marketers are currently investing in Facebook, as growing demand has driven up cost.
“This is a typical pattern for display ad networks as the audience becomes more savvy and demand causes prices to rise,” the report explains. “Brands investing now will save money building their Facebook ad programs now by taking advantage of currently low rates that will continue to increase over time. Facebook’s top advertisers have increased their ad spend 10 fold.”
Even with a reduction in click-through rate, Facebook has cut into Google’s lead in overall online advertising. According to eMarketer, the social networking site saw a 151 percent increase in global advertising revenue in 2010, exceeding $1.8 billion.
Courtesy of Spetnik Solutions







