Facebook is under pressure to prove it can monetize its mobile platform, and that appears to be happening. Following the success of sponsored stories, Facebook's recently introduced mobile ad product is driving greater click-through rates and CPMs for brands. Cost-per click for all Facebook ads surpassed $1 for the first time in the United States, where CPMs jumped 25 percent in the last quarter, according to a new report from social media consulting firm TBG Digital, which compiled results from 406 billion impressions in more than 190 countries.
The social media marketing vendor tracked campaigns for 276 clients in the last quarter and reported Facebook's new mobile ads are already outperforming desktop ads in click-through rates and CPMs by 14 times. Mobile newsfeed ads garnered a 1.14 percent CTR on average. Facebook is banking on the success of mobile ads as well, earning $9.86 for every thousand mobile ads served. That's 13 times more than it receives for desktop ads.
The Facebook mobile ads also performed much better than Twitter ads, said TBG, which recently measured 24 million Twitter ad impressions. The result: Facebook mobile ads drove 4 times as many CTRs as Twitter ads.
Across all formats studied, click-through rates reversed a downward trend, increasing 11 percent, according to the report. CPMs jumped 58 percent from the year-ago period.
"Mobile ads were introduced during this period, which has led to the first increase of click-through rates since the introduction of sponsored stories," said Simon Mansell, CEO of TBG Digital. "Mobile is a big driver of performance in this quarter."
The display ad veteran said he was particularly surprised by sponsored stories, which are performing better than Facebook Ads. TBG found that brands focusing on generating page likes saw fan acquisition costs drop 39 percent over the past 12 months while increased competition and better targeting parameters on the platform are driving up the average cost of Facebook Ads, said Mansell.
"CPM will also be driven by better click-through rates on mobile ads," he continued. And because the U.S. market is "more brand focused," Mansell said "the United States will continue to be the workhorse for their revenue."
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Matt Kapko has been writing about mobile since 2006, before it became cool. Based in Long Beach, CA, he has covered mobile entertainment, digital media, marketing, and advertising for several business media outlets. A former editor and reporter for RCR Wireless News, paidContent, and iMedia Connection, Matt is a regular freelance reporter for ClickZ. You can follow Matt on Twitter at @MattKapko or drop him a line at firstname.lastname@example.org.
December 12, 2013
1:00pm ET / 10:00am PT