What if Facebook ads are actually working?


Cynics love to bash Facebook (Nasdaq: FB) ads.

Who clicks on them? Who buys them? Why is Jesse Eisenberg such a smug CEO?

While we may never know why Eisenberg stiffed the new Spider-Man, we’re finding out that a lot of companies are paying good money to get noticed on Facebook — and they are getting noticed.

TBG Digital’s new Global Facebook Advertising Report Q2 2012 shows some pretty encouraging trends for the leading social networking website operator. According to the study, Facebook is now charging 58% more per impression than it was a year earlier.

In other words, while some bearish reports in recent weeks have alluded to a slowdown in growth in some countries, advertisers are still paying more to reach out to the more than 900 million active users of the site.

Oh, the news gets better. Click-through rates — the percentage of impressions that get clicked on — have also been moving higher. The 11% increase is important, and it’s largely the result of the company introducing new forms of advertising.

Now that sponsors can target news feeds — instead of simply the column of ads to the right that are visible on Facebook’s desktop version — the company is doing a great job of monetising mobile.

Remember the sceptics who  argued that Facebook’s ability to cash in on the mobile migration wouldn’t work because of the smaller screens? Well, the study shows that the mobile ads inserted in news feeds are receiving 14 times greater click-through rates than the traditional PC-based ads. Yes, the Sponsored Stories initiative is working.

In news that may be either problematic or opportunistic for LinkedIn (Nasdaq: LNKD), the highest rate of cost per click across Facebook can be found in the Jobs & Education category. Commanding an average of US$1.42 per click, even Google (Nasdaq: GOOG) has to be kicking itself as it tries to scale Google+ quickly to take on Facebook in the social networking realm.

Yes, Facebook is working as a business — and you don’t have to wait until the quarterly report to realise that.

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The Motley Fools purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

A version of this article, written by Rick Aristotle Munarriz, originally appeared on fool.com

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