Facebook Sees ROI with Social Ad Adoption

Marin Software released data this week highlighting the recent gains in social ad adoption by Facebook advertisers. New ad formats, such as Sponsored Stories, leverage word-of-mouth recommendations to bring social context to traditional ad creative. These highly relevant social ads are becoming a more effective way for Facebook advertisers to reach and engage their target audience. Some of the key data include:

• A 50% increase in click-through-rate (CTR) for social ads year-over-year
• An increase from 5% to 23% in Facebook ad budgets allocated towards social ads
• An 86% increase in cost-per-click (CPC) for social ads year-over-year

These year-over-year increases point towards a strong advertiser adoption rate. The relevant nature of social ads, coupled with strong CTRs, has caused a shift in advertising budgets from traditional ads to social ads. With the increasing adoption rate, competition amongst advertisers has resulted in increasing CPCs. Given current trends, Marin predicts that Facebook advertisers will allocate 50% of their budget towards social ad formats by the end of 2012. This would mark a significant jump from the current 23%.

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