Wall Street may be done beating up Facebook shares, at least for the time being, but the world’s largest social network still faces significant challenges.
One of the biggest and most talked about: skyrocketing mobile usage that is making it more difficult for the company to monetize its massive audience.
But the news may not be all bad, at least according to “social advertising agency” SocialCode. In looking at 7m Facebook ad impressions served this month for 12 clients, the firm found that ads served through Facebook’s mobile news feed delivered a much higher CTR (0.79%) than desktop news feed ads (0.327%).
That’s probably music to the ears of Facebook executives who need to find ways to prove that Facebook has a shot at monetizing mobile users sooner than later. What’s more, SocialCode found that the effective CPM for Facebook’s mobile ads was, at $7.51, much higher that of its effective CPM across all types of plaecements, $1.62.
Is what’s good for Facebook good for advertisers, however? SocialCode’s Chief Innovation Officer, Addie Conner, admitted that many of the mobile click-throughs may have been unintended, meaning that advertisers could be paying a premium for clicks that are less likely to convert.
Indeed, as AdAge’s Cotton Delo notes, a recent study conducted by Pretarget and comScore found that the click-through rate, long one of the most popular metrics by which digital campaigns are partially measured, rarely correlates well with conversions. Unless mobile ads prove to be the exception to this, which seems highly unlikely at this point, Facebook may find itself in an awkward position, having boosted CTRs and CPMs — on mobile no less — but giving advertisers nothing to show for it.
Obviously, it would be unreasonable to expect that Facebook will crack the mobile advertising nut overnight, but for brands going along for the ride while the company tries to figure it out, SocialCode’s research suggests that playing it safe may be the most prudent approach.