Customers are responding to Facebook’s new mobile ads with the equivalent of “likes,” according to data from two new studies. As reported by MobiADNews, initial figures on clickthrough rate (CTR) and effective cost per mile (eCPM, with “mile” meaning a thousand views) give mobile advertisers plenty to like, as well.
Mobile Facebook Ads Give Favorable Impression
A study of 280 million ad impressions by Facebook Ads API partners TBG Digital, AdParlor, Nanigans and Spruce Media indicates ads placed on Facebook’s mobile news feed have a CTR of 1.14 percent and an eCPM, which measures the revenue selling ads on a CPM basis would provide, of US$ 9.86.
The mobile CTR is almost double the 0.588 percent CTR of ads placed on Facebook’s desktop news feed and more than 13 times the 0.083 percent CTR of ads placed on both Facebook’s desktop news feed and sidebar. Similarly, the mobile news feed eCPM is about 2.6 times the desktop news feed eCPM of US$ 3.72 and about 13 times the desktop news feed/sidebar eCPM of US$ 0.74.
In addition, a study of about 7 million ad impressions by Facebook Ads API partner SocialCode reveals the CTR of Facebook mobile ads was 0.79 percent, about 2.4 times the 0.327 percent CTR of Facebook desktop news feed ads and about eight times the 0.099 percent CTR of Facebook desktop news feed/sidebar ads.
Facebook Plans Targeted Mobile Ads
Facebook launched its mobile ad program last month by allowing advertisers to purchase “sponsored stories” on its mobile news feed. The Wall Street Journal referred to this move as an “attempt to address what has long been a sore spot for the company, especially as Facebook struggles to prove its value to Wall Street.”
The Wall Street Journal chided Facebook, whose stock value has wavered since its May 2012 IPO, for being “especially weak” in mobile advertising. According to Facebook regulatory filings, it had not been earning any significant revenue from mobile advertising before its new mobile ad push.
However, an article published today by Yahoo’s The Week online news service suggests Facebook is wasting no time in trying to beef up the profitability of its mobile ads. Facebook reportedly plans to offer a new mobile advertising product that will record the behavior of Facebook Connect users on third-party websites and apps, and then place targeted ads into their mobile news feeds. Yahoo says this deviates from standard mobile advertising practices, with other major mobile ad hosting platforms such as Google and Apple not targeting consumers in this way.
Facebook is to be commended on the impressive early results of its mobile ad program, but should cautiously proceed with plans such as targeting mobile users based on their browsing / app usage behavior. Facebook does not have the best reputation when it comes to consumer privacy, and it needs to balance short-term profitability against long-term negative image problems, which could eventually harm long-term profitability.
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