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Facebook offers a 45% cost-per-click discount for ads that link to another Facebook page rather than an external site, according to research by TBG.

This has led to brands building a presence within Facebook so they can benefit from these lower costs.

The new research, released today, is based on 326bn impressions for 266 clients across 205 countries.

The study also found that CPCs in the US increased by 55.7% between Thanksgiving and December 17. However, CPC price for Facebook ads dropped by 11% in the UK between the third and fourth quarters of 2011.

The drop follows two quarters of rising CPC prices in the UK, and contrasts a 1% rise across the UK, US, German, French and Canadian markets.

Average cost per thousand rates were flat in the UK in the same period, compared to an increase of 8% across the five markets.

The report also found that CTR increased by 18% from Q1 to Q4 in 2011, which TBG says suggests that advertisers are building better ad creatives and taking advantage of Facebook’s targeting options.

CTR differs greatly between sectors though, as the graph below demonstrates.

Facebook has been seeking to drive up its advertising revenue before an IPO, which is rumoured to be scheduled for early this year.

Last week it started placing ads in the news feed, so users see ads based on what brands they and their friends have 'liked'.

David Moth

Published 17 January, 2012 by David Moth @ Econsultancy

David Moth is Editor and Head of Social at Econsultancy. You can follow him on Twitter or connect via Google+ and LinkedIn

1683 more posts from this author

Comments (2)

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Richard Ireland

Not sure all is as it appears. If you compare the CTR for ad types in Facebook, you will typically see higher CTRs for ads that drive internally: Sponsored Stories, Event Ads, Application Ads. Why? Well, probably in part because they have extra CTAs as well as the click-through itself: "Like", "RSVP" or similar. But also because these are socially-connected, and display friend names, perhaps they become more powerful.

And if you know anything about FB advertising you will acknowledge that CTR, CPC and CPM are related: so as the report says, if CTR increased by 18%, but CPC and CPM increased by *only* 8-10% each, then does that show a net loss of competition for ad space - ads are more effective, more responsive, but not driving an equal rise in revenue-per-impression (CPM) for FB.

The value to an advertiser of driving traffic to FB objects is probably far less clear too, and may veen be far less for most industries, than is the value of driving to their own websites. Perhaps that mismatch in the rate of change is evidence of advertisers acknowledging that, and changing bidding strategies based on the type of ads they are running.

over 4 years ago

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Ben Moreau

This has been taken out of context. TBG did not state that Facebook offer a 45% discount, they said that CPCs were 45% cheaper and maybe facebook discount internal pages. I 100% agree with Richard that internal pages tend to have higher CTR and so lower CPCs. This is what we see at Techlightenment, as opposed to simply lower CPCs as an incentive.

over 4 years ago

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