Marin

Facebook Social Ads Ascending According to Marin Software Research

Advertisers Embrace New Facebook Social Ad Format; Research Projects Social Ads To Account For 50 Percent of Facebook Ad Budgets by End of 2012

San Francisco, CA May 08, 2012 – Facebook’s bet on social ads appears to be paying off according to research findings released today by Marin Software, the leading online advertising management platform. In February 2011, Facebook took significant steps to boost the effectiveness and relevancy of social advertising by introducing new social ad units, such as Sponsored Stories. Unlike other Marketplace Ads, which operate similarly to traditional display ad units, “social ads” incorporate user engagement into the ad copy.
According to the Marin Software research, Facebook social ad budgets in the U.S. increased from 5 percent to 23 percent in the last 12 months. The research also projects that by the end of 2012, social ads will account for nearly 50 percent of Facebook ad budgets. Consumer engagement with Facebook ads has also risen in the past year, as measured by click through rates (CTR) improving 50% during the same time period.

News Facts:

  • Advertisers are increasing investments in social ads on Facebook. In the last 12 months, the percentage of Facebook ad budgets in the U.S. allocated towards social ads increased from 5% to 23%.
  • Given the trajectory of the data, Marin Software predicts that by the end of 2012 advertisers will direct 50% of their Facebook ad budgets towards ads that incorporate the user’s social graph.
  • In the past 12 months, the cost per click (CPC) of social ads in the U.S. increased 86% while the CPC of Marketplace Ads overall decreased 15%, further validating the shift in advertisers’ preference towards social ads.
  • Consumer engagement with Facebook ads, as measured by click through rates, has increased 50% over the last 12 months implying a boost in overall ad relevance.
  • Facebook’s move to increase ad relevance through a focus on social ads and the introduction of Sponsored Stories is paying off, as indicated by increased advertiser investment and greater user engagement.
  • Marketers interested in strategies and tactics for advertising on Facebook can download “The Search Marketers Guide to Successful Facebook Ads” on Marin Software’s site at: marinsoftware.com/resources/best-practices/search-marketers-guide-to-successful-facebook-ads.

Quote:

  • “Advertising on Facebook is 100 percent different than paid search in large part to the social aspect of it,” said Andrew Leinicke, Director at Red Bricks Media. “As an advertiser, being able to participate in the social context of Facebook is huge. In the last year we’ve significantly increased our attention to Facebook social ads and we’ve noticed an uptick in response to social ads.”
  • “With Facebook’s introduction of Sponsored Stories last year, two questions arose — will advertisers adopt the new ads and will the new ads produce revenue results?” said Matt Lawson, vice president of marketing and partnerships at Marin Software. “Marin Software’s research confirms that answer is an emphatic ‘Yes’, as budgets continue to increase and will soon represent 50 percent of Facebook ad investments.”

    “In the last year advertisers have directed more budgets to social ads and Facebook users have responded by clicking more often,” said Lawson. “This trend is not only positive for Facebook from a revenue standpoint, but also provides important validation of the opportunity advertisers have to drive revenues from word of mouth marketing efforts.”

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