Facebook Ad Click-Through Rates (CTR) Are Half Industry Average
By Anna Johnson on February 6th, 2011At 0.051 percent, the average Facebook ad click-through rate (CTR) is just over half the banner ad CTR for Internet ad networks in general (see Average Banner Ad Click-Through Rate (CTR) Stabilizes at 0.09 Percent).
Not only do ads on Facebook have relatively low CTRs compared with banner ads in general, but their effectiveness wanes after just a few days. According to Webtrends’ analysis of over 11,200 advertising campaigns on Facebook in 2009, the average CTR HALVES within two days.
Furthermore, the CTR continues to decline until it’s so low that Facebook removes the ad, effectively forcing an advertiser to launch a new campaign.
The quick rate of CTR decay is largely attributable to the fact that the same ads are constantly displayed to the same users. This contrasts with general Internet search and display ads which are constantly served up to plenty of new viewers – search engine users and visitors to thousands of different websites – and can therefore maintain higher CTRs for much longer time periods.
Webtrends’ research also shows that, as with display advertising in general, Facebook ads are eliciting decreasing click through rates (CTRs) even as the cost per click (CPC) and cost per thousand impressions (CPM) are on the rise.
In 2009, the average ad on Facebook generated an average 0.063 percent CTR and cost $0.27 per click and $0.17 per thousand impressions. In 2010, the average CTR dropped to 0.051 percent, while the costs were $0.49 CPC and $0.25 CPM.
So if Facebook ad CTRs are half the norm and tend to drop off so quickly… is it worth advertising on Facebook?
Sure, it is. Webtrends’ finding that Facebook ads yield lower CTRs than general Internet display and search ads doesn’t mean advertising on Facebook isn’t cost effective.
After all, Facebook ads are still much cheaper than many other display and search advertising options. Furthermore, the low CTR doesn’t mean the ads fail to reinforce a branding message. On top of that, the fast rate of CTR doesn’t detract from the fact that the average Facebook user may get a heavy dose of that ad.
If strong, repetitive brand messaging to a highly targeted user is the goal, then Facebook – which can facilitate demographic, psychographic and geographic targeting – may be the ideal advertising medium.
Of course, this is just another situation where you’ll really only know if advertising on Facebook is worthwhile if you give it a shot yourself. The good news is that the relatively low cost of Facebook advertising means that you won’t need to risk much to do so.
March 17th, 2011 at 7:27 am
Very interesting article and similar to our experiences with the channel. Just like any channel there are strengths and weaknesses, and as ever depending on your objectives will determine success or failure. We have found that there is a good level on interaction at a brand level. i.e. targeting people based on brands that they like and then offering advertising for a product that is offered by that brand. There is the potential that the channel is direct response, and I have talked about this on a blog here if that is of further interest: http://www.sleepinggiantmedia.co.uk/posts/facebook-advertising-a-direct-response-channel/
November 28th, 2011 at 5:19 pm
I use a couple of strategies to slow the decay from Facebook ads. I create two similar ads from one successful ad – one by tweaking the demographic model and the other by changing the ad copy and photo. I also create shock ads that are less brand-focused and more curiosity-inducing. Lastly, I try to keep my total number of ads under 10 which means I cull the herd and remove non-performers. I do this daily cuz I’m always coming up with new ad ideas.
It’s more art than science for me but it seems to be working. My CTR for my last real estate client was $2.16 ($6-$8 average for industry) and my current CTR for a local, retail holiday photo business is $1. And since I run my ads on a CPM basis, my targets get a heavy dose of brand…perhaps too heavy?! o.O
A couple of questions:
1. How can I tweak this approach to improve the performance of my clients’ ads?
2. Can you limit the number of times a single user sees the ad? I believe that manipulating this metric could lead to greater reach and less decay. Perhaps it is not in FB’s best interest to loosen this reign?