Social Ads Predicted to Account for 50 Per Cent of Facebook Ad Budgets by End of 2012
SYDNEY, AUSTRALIA -- (Marketwire) -- Facebook's investment in social advertising is paying off according to research findings released today by Marin Software, the leading online advertising management platform. Early in 2011 Facebook introduced new social ad formats, such as sponsored stories, to increase the effectiveness and relevancy of social advertising with its users. These social ads differ from other marketplace ads by including or highlighting user endorsements.
According to Marin Software research, in the last 12 months, the percentage of total Facebook ad budgets allocated to social ads has risen from 3 to 26 per cent. Based on this trajectory, Marin predicts social ads will account for nearly 50 per cent of Facebook ad budgets by the end of 2012. Significantly, the research also found consumer engagement with Facebook ads had risen over the 12 month period, as measured by click through rates (CTR). CTR had improved by 50 per cent during this period.
Marin Managing Director Australia and New Zealand, Nick Gill, said:
"The last year has seen Facebook advertisers invest more in social ads and Facebook users respond by clicking through more often. This trend is positive for Facebook from a revenue standpoint and is expected to continue. It will be driven by a number of factors including the appearance of social ads in people's news feeds and people's clear preference for word of mouth marketing activity."
"Even with the increasing popularity of this ad format, there remains further opportunity for more innovative ad formats."
"Facebook's move to increase relevance and greater user engagement is without doubt paying off. We project that by the end of 2012, social ads will account for 50 per cent of Facebook ad budgets."
Advertisers are investing more in social ads on Facebook. In the last 12 months, the percentage of Facebook ad budgets allocated towards social ads has increased from 3 to 26 per cent.
Marin Software predicts that by the end of 2012, advertisers will direct 50 per cent 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 increased 26 per cent whilst the CPC of other marketplace ads decreased 26 per cent. Further evidence of a shift in advertisers' preferences towards social ads.
Consumer engagement with Facebook ads, as measured by click through rates, has increased 50 per cent over the last 12 months suggesting increasing 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: http://www.marinsoftware.com/resources/whitepapers/search-marketers-guide-to-successful-facebook-ads
Marin Software provides the leading digital ad management platform, with over 1,500 brands managing more than $3.5 billion in annualized ad investments on Marin. Offering an integrated platform for search, social, display, and mobile marketing, Marin helps advertisers and agencies improve financial performance, save time, and make better decisions. Headquartered in San Francisco, with offices worldwide, Marin's technology powers marketing campaigns in more than 160 countries. For more information, please visit: http://www.marinsoftware.com
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