What is Facebook CTR?  How effective are Facebook Ads?

Online advertising is only as effective as its click-through rates (CTR). You need people to click on your ad and initiate an action, simple reach and exposure are not enough. So as Facebook ads enter the forefront of most digital marketing strategies as marketers salivate with the dreams of reaching Facebook’s 500 million users, just how effective are Facebook ads?

Webtrends, a social marketing and analytics company, recently produced a whitepaper that sheds some light on the effectiveness of Facebook advertising.

What’s nice about this report is that not only do they offer Facebook ctr (click through rates) per industry, they also offer an average cost.

Facebook CTR Is Declining & Getting Pricier

The rates at which U.S. Facebook users are clicking on Facebook ads (designed to generate fans) are in decline from 2009 to 2010. The click-through rate on these Facebook ads was at .063% in 2009 and declined to .051% a year later.

At the same time as the Facebook ctr goes down, the price is going up. Facebook ads seem to be rising from 17 cents per thousand in 2009, up to 25 cents in 2010.

The CPF category is the data’s conclusion that based on these ads…a Facebook fan costs you $1.07.

Facebook CTR Burns Out After 5 Days

From the findings, it appears that Facebook’s targeted ads began to burn out after an average of three to five days.  In advertisers, three to the five-day timeframe the Facebook CTR of the ad will dive to a point where it is deemed inactive, promptly followed by Facebook deactivating the ad and sending you back to start over.

This timeline is logically based on the premise of the Facebook ad platform.  Facebook’s marketing benefit is that target-ability is extreme and you can literally pick exactly what targets will view your ads, which is a dream for marketers.  However, that also creates an audience that won’t grow.

Unlike search ads where new people constantly search for your keywords, Facebook’s ad targets are a limited bunch.  Once your targets have seen your ad…they either clicked on it or they ignored it.  That’s it.  They won’t all of a sudden see it for the fifth time and then be compelled to click.

Keep these trends in mind when creating a Facebook ad strategy.  Especially if you’re new to Facebook advertising, this data can be used as a benchmark for you to keep track of how effective your own ads are.  If you’re way off target, perhaps it’s a good idea to scrap your ad and start over.

Facebook CTR Study Notes

The Webtrends report is an analysis of over 11,529 Facebook ads and the majority of these ads were focused on Facebook fan acquisition.  Also, the 13-17-year-old market was excluded from our results based on low data.