Media & Entertainment

Advertising Report: Facebook Now Earns 23% More Per Impression Than In Q1 2011


Facebook is making significantly more money per ad now, charging 23% more per 1000 impressions than at the start of 2011. There are still cheap ad clicks to be had on Facebook — you just have to keep traffic bouncing around within the social network. Facebook appears to be incentivizing advertisers to grow their Facebook applications and Pages, with cost per click campaigns that point internally costing 29% less than those linking offsite. These figures from a new study by ad agency giant TBG Digital show strong monetization performance and potential for Facebook as it prepares for an IPO this summer.

The Q4 2011 Facebook Advertising Report form TBG Digital looked at 326 billion ad impressions ran by 266 of its clients across 205 countries. The findings are statistically sound, having been vetted by the Cambridge University Psychometrics Centre.

TBG Digital CEO Simon Mansell tells me that the CPM rise indicates that “Facebook has done a good job growing the money it makes from ads”. Sponsored Stories have been a particular success. These social ads which promote the interactions of a user’s friends with brands attract up to 46% higher click through rates. This allows Facebook to earn more money while offering a lower cost per click because it doesn’t have to show an ad as many times to get a click, and can sell that real estate elsewhere.

Q4 2011 was a particularly strong quarter. CPM rates increased an average of 8% from Q3 across major markets including the US, UK, Canada, France, and Germany. CPC went up 10% in the US, showing high demand from advertisers despite plateauing user growth in Facebook’s most important market. A CPC dip in the UK and France was likely due to the more recent adoption of Sponsored Stories in those countries, whereas other countries were already using them.

Worldwide, ad click through rates increased 7% in Q4 and 18% in 2011, showing that more advertisers are mastering social ad types, targeting and creative. Educating the long-tail of small and local businesses on how to use its ads products is a big focus for Facebook in 2012. The company recently struck partnerships with the U.S. Chamber of Commerce and National Federation of Independent Businesses to provide training sessions to their members.

Ads were particularly expensive this holiday season, with CPCs up a massive 55.7% in the US from November 21st and December 17th. Businesses not specifically trying to reach holiday shoppers should probably pause their campaigns during this season to avoid increased costs due to skyrocketing demand.

Financial institutions are navigating strict industry regulations and growing their Facebook spend. TBG clients such as HSBC and Capital One pushed the industry’s share of total Facebook ad impressions from 12% to 18% in Q4. However, these businesses often pay a lot for their ads since the primarily send traffic offsite.

To reduce their costs, financial institutions should consider driving traffic to their Facebook Pages. Internally pointed ads cost 29% less, and ads that specifically ask users to become a fan of a Page cost 45% less than those linking offsite. Why does Facebook offer this incentive? Because internally pointed ads keep users on the site where they can continue to be exposed to ads.

Mansell expects CPC and the amount Facebook earns on ads to continue to increase in 2012, despite user growth slowing as Facebook hits high penetration in 1st world markets. Eventually, CPC growth may slow if advertisers think they’re paying too much. Facebook also needs to watch out for competitors. If Twitter grows aggressively, advertisers demand could shift there.

Facebook’s goal in 2012 needs to be balancing ad rate hikes with retention big brands and small businesses spend to maintain momentum for its planned $100 billion IPO. Thankfully it will have new premium ad inventory to sell as it begins to inject Sponsored Stories ads into the news feed.

More TechCrunch

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

1 day ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

1 day ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?

Strava announced a slew of features, including AI to weed out leaderboard cheats, a new ‘family’ subscription plan, dark mode and more.

Strava taps AI to weed out leaderboard cheats, unveils ‘family’ plan, dark mode and more

We all fall down sometimes. Astronauts are no exception. You need to be in peak physical condition for space travel, but bulky space suits and lower gravity levels can be…

Astronauts fall over. Robotic limbs can help them back up.

Microsoft will launch its custom Cobalt 100 chips to customers as a public preview at its Build conference next week, TechCrunch has learned. In an analyst briefing ahead of Build,…

Microsoft’s custom Cobalt chips will come to Azure next week

What a wild week for transportation news! It was a smorgasbord of news that seemed to touch every sector and theme in transportation.

Tesla keeps cutting jobs and the feds probe Waymo