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April 16, 2012

Facebook Ad Engagement Falls 8% While Ad Prices Increase

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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.  read more

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