Facebook Ad Engagement Falls 8% While Ad Prices Increase

Facebook AdsFacebook ad engagement in the United States hasn’t been kind to advertisers falling by 8% in the final quarter of 2011 and Q1 2012. While engagement has taken a steep decline Facebook has begun to charge 41% more money for ads worldwide.

Part of the ad drain comes from Facebook’s saturation of ad spots, going from four to seven ads on many pages, a consideration that often leads to lower click-rates as site users have more ad choices to choose from.

Facebook has been able to increase ad prices dramatically while stuffing pages because demand is still outweighing supply. Fro example last year Facebook last year displayed 372 billion ad impressions in almost 200 countries.

Advertising for Facebook however goes beyond simple click-through driven ads, the site needs to prove that it can drive traffic to major sites and Facebook increased its click-through rates for news sites by 196% thanks in large part to the company’s social readers which allows company’s such as Yahoo, The Washington Post and others to display recently read stories on users Facebook walls. 

In the meantime Facebook continues to look for new and exciting ways to display ads, having already integrated stories and other adverts directly into a users account. The biggest move for the social network lately has been the jump into mobile ads where millions of users take advantage of the company’s official Facebook mobile programs for Google Android, Apple iOS, Windows Phone 7 devices and other mobile systems.

Do you think Facebook can keep up its ad dominance among increasing competition and higher pricing?

 

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