ROI has always been a big question mark when it comes to social media marketing. With the total spending on social advertising estimated to cross $6 billion, the same question looms larger than ever. The results of the Webtrends study indicate dismally low and worsening Facebook ad performance metrics. In 2009, the click-through-rates for Facebook ads were 0.063% costing $0.27 per click. The figures worsened in 2010 with the CTRs reducing to 0.051% and cost per click going up to $0.49.
The CTR for Facebook ads targeted to US were lower, at 0.065%, compared to CTR in other countries, which averaged at 0.087%. Chitika conducted a comparative study of CTR for Google and Facebook text ads in North America. The difference was significant. The CTR for Google ads was 0.70%, while the Facebook ads had a CTR of only 0.08%.
Although these results indicate that Facebook ads are not very effective, this ‘average’ CTR may be meaningless. There is a vast different in CTR and CPC between different industries and brands. For instance, tabloids and blogs have the highest CTR at 0.165%, while healthcare ads are the worst performers with a CTR of 0.011%.
Even in a single industry, for instance the travel industry having an average CTR of 0.086%, there are significant differences between the CTR and CPC of different brands. Moreover, the objectives for different ad campaigns differ. All these indicate that an average CTR is meaningless.
The results of BLiNQ Media study indicate that targeting can increase the efficacy of Facebook ads dramatically. CTR for targeted ads were 7.5 times higher than the non targeted ads. Marketers can achieve much better results with targeted Facebook ads.