Update: TBG Digital has clarified the Facebook/Twitter comparison. “We took a deeper look at the data and, unfortunately, the engagement rates were not comparing like for like. Twitter engagement rate measured click-through pate on Promoted Accounts whereas the Facebook CTR was for Newsfeed ads. A more comparable product for Twitter would have been Promoted Tweets, which typically see 1-3 percent engagement rates on desktop and even higher on mobile,” the company wrote on Friday in a post to its site.
Facebook has taken a lot of flack for its struggles to monetize mobile. The company only began running ads on mobile devices a few months ago and didn’t break out mobile as a standalone buying option until June, but in that time Sponsored Story ads that run in the mobile News Feed have notched a 1.14 percent clickthrough rate (CTR) on average versus 0.083 percent for those running on desktop and 0.588 percent for those running only in the desktop News Feed, according to a study by social ad firm TBG Digital. For the study, the company looked at 406 billion impressions served during the second quarter for 276 clients in more than 190 countries.
TBG Digital recently took a look at 24 million ad impressions on Twitter and found that they averaged a 0.266 percent CTR, or less than one-quarter the CTR for Facebook’s mobile ads.
TBG Digital CEO Simon Mansell chalked up the success of Facebook’s mobile ads to their placement and extends that rationale to ads that pop up in the desktop News Feed. The company conducted an eyetracking study a few years ago, he said, and found that users’ eyes typically stay in the center of the page where the News Feed is.
While mobile may be Facebook’s CTR star, overall clickthrough rates were up 11 percent year-over-year (obviously that growth excludes mobile since Facebook didn’t run mobile ads during Q2 2011). And the average cost-per-click that Facebook is charging advertisers rose 9 percent from the previous quarter, crossing the dollar-mark in the U.S. to average $1.04 CPC on 13 percent growth. However from Q4 2011 to Q1 2012, average CPCs for U.S. campaigns jumped 20 percent.
Mansell said the Q1 to Q2 CPC slowing is to be expected because when CTRs improve, advertisers generally bid lower CPCs. “It should have an overall good impact for Facebook because obviously the money they’re earning is [from ads charged on a cost-per-thousand-impressions basis],” he said.
As for that CPM money, TBG Digital found that the average CPM rate increased by 58 percent year-over-year, with the average CPM for U.S. campaigns up 25 percent to $0.39. Mansell said the demand for running these types of ads on Facebook has increased with even more traditional advertisers beginning to see them as “a more scalable way to move brand metrics.”
“Even though Facebook had some challenges with the whole GM thing, I think overall brands are starting to take it seriously as an alternative to TV,” he said.
Helping matters is the success of Sponsored Stories versus more traditional Facebook ads. TBG Digital compared Page Like Story ads, which feature social context such as “John Doe likes Advertiser X,” versus Page Like Ads that don’t and found the former generated a 53 percent higher CTR than the latter and had a 39 cheaper cost-per-fan. That stat comes in spite advertisers being charged 6 percent higher CPCs and 62 percent higher CPMs for Sponsored Stories versus standard ads.