Why Facebook Ads Seem More Expensive These Days: Because they Are


Here’s a number that won’t shock anyone who’s been buying Facebook Ads consistently for the past year or two: Facebook’s cost-per-click jumped 22% in the second quarter of 2011, after a 40% rise in the previous quarter, increases that ad platform Efficient Frontier attributes to heightened competition for ad space. Funny about that — more people want Facebook Ads and they get more expensive, and Efficient Frontier expects Facebook’s rates to continue to rise for the rest of the year.

This news comes at the same time that Google’s cost-per-click rose 12% over the past year, helping the company to a healthy $9 billion in second-quarter revenue (Google’s ad market has been around much longer than Facebook’s, so it’s naturally more saturated and seeing slower growth). A year ago, Facebook Ads were cheeeap — on one client campaign, I saw costs-per-click as low as 22 cents! Not any more — at NWLC, I’ve been lucky to pay two or three times that number.

And as ad prices rise, the cost of acquiring a new follower or donor rises with them, naturally changing a nonprofit or political caompaign’s estimate of the relative worth of various channels. Will the demand for Facebook Ads eventually price them out of the political and advocacy markets?

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2 Comments:

  1. Derek Pangallo

    The ads are becoming more expensive, but you can still get cpc below $.25 if you use pay-per-impression. Many of the average joes jumping into facebook advertising now are inflating the price by setting a high cpc bid and targeting too large a demographic.

    If you use a geo-targeted ad with a “friends of connections” component, you’re sure to see price go down. The caveat here is that since there are now more than three ads per page, yours might appear “below the fold”.

    Still, using a cpm with a bid near the high-end of the recommended spectrum and a well-targeted, relevant ad will keep your clicks in the cheap, for now.

  2. Pingback: e.politics: online advocacy tools & tactics » Did Facebook Ads Win Ames for Bachmann? Plus, Betting the Farm(ville)

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