Social games have lower costs per click on Facebook than brands do, analysis shows

On average, brands advertising on Facebook pay more per click than social game companies do, according to data provided to us by third-party vendor AdParlor.

Facebook ad costs continue to rise across a number of industries as competition increases, particularly among consumer brands and the hardcore social game sector. Advertisers can use this information to better understand their own Facebook ad performance.

The social network does not do much to help advertisers interpret the results of their campaigns. CPCs and clickthrough rates mean little without averages to benchmark against, but advertisers must look to third parties for comparison. A recent survey from Social Fresh found advertisers self-reporting an average CPC of $0.80. This latest data from AdParlor, a Facebook Ads API partner, shows daily fluctuations in average CPC but the rate is always below $0.80.

For social games, average CPCs are even lower. AdParlor CEO Hussein Fazal says this is because social game advertisers can define narrow targets that result in higher CTRs and lower CPCs than most brands can achieve. However, there is variation within the social game category. Hardcore games — those designed for longer session times that include more strategy or combat– have higher CPCs than virtual world games, including simulation games, pets and city games. Both of these categories have higher CPCs than casual social games, like puzzles and trivia. This could be related to there being more competition in the hardcore social gaming space, but Fazal also believes that hardcore games are getting better at monetizing and so they are able to pay more to acquire each new user.

AdParlor’s data comes from more than 500 clients across a range of industries. This first graph shows how CPC compares for brands and agencies versus social game developers. It represents a sample size of 100 million clicks between June 23, 2011 and Feb. 27, 2012. The thick blue line represents average CPC rates for agencies and brands. The thick green line represents average CPC rates for social games. The thin lines are the corresponding linear regressions for each category.

This graph takes a deeper dive into the differences among types of social games. Although it covers a shorter period, Jan. 1 through Feb. 17, it represents a sample size of 150 million clicks. The thick blue line represents hardcore social games, red is virtual world games and green is casual games. Again the thin lines are the linear regressions for each category.

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