Two reports out just ahead of Facebook's Q3 2012 earnings call paint a picture of plummeting CPCs for ads on the social network. The average cost per click for Facebook ads in Canada and the US has fallen back to 2010 levels, according to TBG Digital.
This quarter, they report, the average CPC fell 40 percent in the United States and 27 percent in Canada. Spruce Media puts the CPC decrease at 18.2 percent, compared to Q3 2011.
It's not all bad news, says Spruce Media. Click-through-rates have increased at a faster rate; advertisers are seeing improved performance per ad viewed, making CPMs worth more to advertisers. CPMs have increased 27.5 percent YoY, while CTRs are up 57.2 percent. In the United States, they report, CPMs rose 40.5 percent while CTRs rose 61.1 percent.
"From a Facebook perspective, the increase in CPMs is good news," Spruce Media's Justin Kistner writes of his findings. "Increased CPMs means they are increasing their revenues per impression. If Facebook is maintaining their inventory sell through rate, then it should equate to more revenue per user," he explained.
TBG Digital expects CPCs to increase, noting, "High click-through rates provided by News Feed ad placements have meant that advertisers do not have to spend as much. This may have had a positive effect on CPCs. Expect to see CPCs rise as competition for inventory increases."
TBG Digital and Spruce Media each evaluated billions of Facebook ad impressions for their reports.
Facebook will report their Q3 2012 earnings later today, beginning at 5pm EST.
This article was originally published on Search Engine Watch.
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Formerly the Lead Writer at Search Engine Watch, Miranda now edits at ClickZ. A member of the Professional Writer's Association of Canada, she has authored over 60 e-books, 300 client projects and thousands of articles and blog posts for clients ranging from SMBs to government agencies and Fortune 100 companies.
Miranda studied e-commerce at Athabasca University and specializes in marketing, business and educational material. In addition to her work with ClickZ, she currently assists the Province of Ontario Ministries of Research & Innovation and Economic Development, Trade & Employment with their copywriting and SEO goals. She is one of a handful of Canadian consultants experienced with Ontario's new adult literacy curriculum framework and as such, is contracted by literacy agencies and publishing houses to develop new learning material.
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