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Technology

Facebook Advertising Works Better than You Think

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By Paul Ausick Published
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courtesy Facebook Inc.
According to the latest data from advertising research firm TBG Digital, advertising is doing just fine for Facebook Inc. (NASDAQ: FB). The rates advertisers are paying for impressions, as measured by cost per thousand impressions (CPMs) rose 58% in the past 12 months, to $0.39/impression in the US. Click-through rates (CTRs) are up 11% and the cost per click (CPC) to advertisers rose above $1/click in the US and Canada for the first time ever.

In mobile advertising, Facebook ads are more than four times more engaging than Twitter ads as measured by CTRs. Facebook’s mobile newsfeed achieved a CTR of 1.14%, compared with a CTR of just 0.27% for Twitter ads.

The bigger news, though, might be that mobile ads garner a CTR that is 14 times higher than ads delivered to desktop machines. TBG does say that new ad types, such as Facebook’s Mobile newsfeed ads, initially generate high CTRs that may decline over time. That is likely due either to their novelty or to users’ clicking the ads by mistake because they don’t know what they’re looking at. TBG also notes that Facebook received $9.86 in CPMs for mobile ads, more than 13 times the amount the company received for desktop ads.

Facebook’s shares are up about 2% today, at $28.65 shortly before noon. The post-IPO range is $25.52-$45.00.

The full report from TBG Digital is available here.

Paul Ausick

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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