Facebook Ad Performance: What Happened?

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The story about Facebook ads getting half the clicks of network banners caught our attention earlier this week. A snippet from the ClickZ piece:

Facebook’s average click-through rate was 0.051 percent in 2010, down from 0.063 percent the year before. So for two straight years, the platform has come in below the industry standard of 0.1 percent for banner click-throughs. Cost per click was $0.27 (2009) and $0.49 (2010) for those years, according to Webtrends.

Why aren’t Facebook ads as successful as banners?  A couple of insights:

  • Catching people on a social network is different. They have a different mindset. People aren’t searching for products as they are on search engines.
  • Banner ads, if targeted correctly, are connecting with type of content people are searching. That user is very engaged. For example, someone on Auto.com gets a Toyota ad. It’s more likely they’d click on it than if that same person were on Facebook talking with friends.
  • Banners provide more “real estate” than Facebook ads. Banners have a huge leg up because they can be bigger, more eye-catching, even animated, and offer more room to tell the story.

We’ll be curious to see how the newly-launched “Sponsored Stories” ads perform. Stay tuned…

–The Advertise.com team