Facebook Sponsored Stories and Post Ads perform significantly better than Social or Web Ads when measured by click-through rate (CTR), according to June 2012 research from Kenshoo Social and Resolution Media. With high CTRs contributing to lower cost-per-clicks (CPCs), Post Ads have the lowest CPC rates, though Sponsored Stories easily lead in a new metric measuring targeted reach. The report defines the ads as follows:
A Post Ad is content generated through owned media that gets turned into paid media. In this case, a post made on a Facebook Page becomes an ad unit and placed within the newsfeed or on the Facebook homepage of targeted users. A Sponsored Story is content generated by earned media that gets turned into paid media. In other words, the ad itself is generated by Facebook users through their social interactions with a brand on Facebook. A Web Ad encourages Facebook users to engage with owned media outside of the Facebook network, and a Social Ad encourages Facebook users to engage with owned media existing within the Facebook network.
Post Ads, Sponsored Stories Have Highest CTRs
Measuring by CTR, the report finds that Post Ads and Sponsored Stories (both at 0.07%) perform better than the other ad types, with Social Ads and Web Ads seeing CTRs of 0.04% and 0.03%, respectively. Post Ads, though, have a much lower CPC ($0.24) than the other ad types, with Social Ads sporting the highest CPC ($0.78). The report offers as an explanation the fact that Social Ads and Web Ads are the easiest to show direct ROI and associate value, leading to justifications for increased bid rates.
When looking at ad rates on a cost-per-thousand impressions (CPM) basis, the report finds that Sponsored Stories have the highest cost ($0.31), while Post Ads and Web Ads have the lowest ($0.18).
Sponsored Stories Most Effective for Reach
The Kenshoo report identifies a new metric – ad exposure rate – which measures what percentage of the entire desired target audience a brand is actually reaching and exposing to its message. Showing that high Facebook ad exposure rates correlate to high CTRs and conversion rates, the report reveals that in this metric, Sponsored Stories lead by a wide margin, with a 35.99% exposure rate. No other ad type has an exposure rate greater than 1.5%.
Mobile Ads Fare Better
Of note, according to TBG Digital, as reported by TechCrunch, mobile newsfeed Sponsored Stories are generating far higher CTRs than their desktop equivalents. Indeed, basing the figures on an analysis of 17 TBG Digital clients and more than 278 million ad impressions, the study finds that mobile Sponsored Stories have a CTR of 1.14% and CPC of $0.86, compared to 0.588% and $0.63, respectively, for desktop newsfeed Sponsored Stories. The disparity is even greater when factoring sidebar ads into the desktop performance figures: this combination shows desktop ads generating just an 0.083% CTR and an $0.88 CPC.
- According to the Kenshoo report, Sponsored Stories promoting page (0.07%) or post (0.09%) likes generate higher CTRs than those promoting application activity (0.02-0.05%).
- 80.7% of Social Ad clicks lead to a brand page. Facebook users also engage with Social Ads promoting pages at a higher rate (0.04% CTR) than any other Facebook object, such as an app or event (each at 0.02%). This is likely due to the ubiquity of pages and the familiarity users have with them. Interestingly, June 2012 analysis from Rubinson Partners and Compete finds that liking a brand on Facebook is only valuable if the fan engages by returning to the fan page.
- After the 6th impression, Facebook ads’ average conversion rates drop dramatically, by roughly 75%.
About the Data: The Kenshoo Social report reflects aggregated global data across a wide range of brands whose Facebook ad campaigns are managed by Resolution Media using Kenshoo Social. Industry verticals represented include entertainment, finance, retail, and insurance, among others. The