Spending on Facebook Ads Nearly Doubled in Less than a Year

For anyone on Facebook, regular user or advertiser, it’s no secret that there are a lot of ads on the site, and thus there are a lot of advertisers choosing to use Facebook. But when the numbers are revealed, even the big-spending brands are shocked at just how many users are spending big dollars to have their ads displayed via this social networking giant.

If social marketing were Greek gods, Facebook is the Zeus high atop Mount Olympus, and the rest of creation makes sure to pay its collective dues. According to the latest digital marketing report released by Adobe, spending on Facebook advertising (measured for this year’s first quarter) has increased by a whopping 93% since the first quarter of 2011. Obviously, this means that brands are increasing their presence on the site, and also that newer features like Timeline, initially thought scary, are actually helping with CTR and overall trust.

With more money being spent by more brands, however, there is a fear that startup advertisers on Facebook will start out behind the 8 ball, fighting an uphill battle for recognition while being pushed around by the big guns. Could this be the case?

How Advertisers Benefit from the Numbers

The simple fact, backed up by multiple studies and almost every conceivable number compiled, is that all advertisers on Facebook are benefiting in numerous ways – even the smaller startups who aren’t breaking the bank to compete with the big dogs.

While spending increased by 93% over the course of a year, consumer engagement actually increased by 176%, almost double the rate of spending! The new platform changes Facebook has made have given users more faith and trust in the ads they see. Engagement also goes up when brands pay more attention to the quality of the product they release, and with CPC rates a lot higher last year and at the beginning of this fiscal year, quality was emphasized like never before.

The good news here is that the CPC rates have already dropped and are continued to keep dropping. That’s a start contrast from the 40% quarter-to-quarter increase over the previous three quarters, and it’s a sign that the market is stabilizing far ahead of schedule.

One number that is expected to continue to grow is the ad engagement rate via Facebook. Again, this is great news for all advertisers on the site. With more ads being viewed as legitimate and trustworthy, more brands are able to use social media overall to market their products and services effectively and without needing the CPC ratio to shoot up through the roof to weed out the little guys. Success in a method fosters fairness in the game, whereas low success rates leave the game rigged to where only those inclined to spend a fortune can play it.

The best ads via Facebook are the sponsored ads. These are seen as 36% more trustworthy than the average ad on the site. Facebook also leads to word-of-mouth, and when word-of-mouth is used to speak highly of an ad, 92% find those ads to be trustworthy.

In summation, advertisers on Facebook can expect the costs to go down and for the engagement to go up, at least for the foreseeable future.

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About The Author
Craig Robinson is the editor of Qwaya.com, a Facebook Manager Tool.

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