Facebook Earns 23% More On Impressions That Last Year

Facebook is more profitable than ever now. We have written about how it may have even surpassed online retail giant Amazon this year in terms of profit. How did they do it? Facebook is free and it will always be according to the website. The answer is ‘ingenious use of handling advertising on the site’.  Facebook has almost 900 million people using its service. A Global brand might will feel delirious when it realizes that Facebook has brought their entire TG to them.

Facebook has started paying more attention to mobile because it recognizes that more and more people use Facebook on the go. Advertising on the mobile space a literally an ad buyers delight. They have also started incentivizing advertisers by introducing CPC campaigns which cost some 29% less. Digital agency TBG Digital has compiled a study which shows how Facebook has a robust potential for monetization. You can view the report here.

The study analyzed over 326 billion ad impressions run by 266 of their clients in some 205 countries. The study shows how the agency used Facebook’s Sponsored Stories to get a 46% higher click through rate (CTR) on their ad campaigns. Facebook thus earns more money while still providing a low cost per click.  Sponsored Stories have now changed to featured stories in your News feed.

Q4 in 2011 was a good one for Facebook as CPM rates increased on a average of 8% from the previous quarter in major countries like US, UK, Canada, France and Germany. The Worldwide CTR increased by 7% in Q4 and 18% for the whole of 2011. Holiday season ads are pretty expensive on the social network and if you do not want to expressly target the holiday audience, the study suggests that you pause your campaigns during that time. This shows that marketers and advertisers are slowing gaming the ad platform given by Facebook. The study also reveals that ads pointing to your site rather are more expensive than those pointing to your Facebook page. The difference is somewhere around 29% and that is a substantial amount. The ads specifically asking you to ‘like’ their page cost even lesser. This incentive by Facebook is provided so that people are not redirected out of the social network due to an ad. this gives one more advantage to Facebook – showing the user more ads thus making ad campaigns cost less and still making them profitable to Facebook.

Facebook does not really face any stiff competition yet but Twitter and Google might just get people to advertise with them by being aggressive. The increase in monetization is also favorable to the company since it needs to justify its $100 billion IPO.