Facebook ad prices increase by 74% as demand soars

The cost of advertising on Facebook is rising fast as more and more large brands allocate greater marketing resources to their online efforts. A recent report published by TBG Digital, an independent marketing firm specialising in Facebook advertising campaigns, suggests that the average Facebook ad CPC (cost per click) rate increased by 74% in the past 12 months.

In four of Facebook’s largest markets, the US, UK, France and Germany, the average Facebook ad CPC increased by 74% between Q2 2010 and Q2 2011. For the same period, the average Facebook ad CPM (cost per thousand impressions) increased by 45%, while in the UK alone, Facebook’s ad CPM rate increased by 60%.

The report reveals that the number of brands undertaking marketing campaigns on Facebook has risen by 104% between Q1 2011 and Q2 2011. TBG Digital case studies also found that brands witnessed a 435% improvement in brand conversion rates when they target advertising at existing Facebook fans.

The retail industry represent the most successful brands employing Facebook as an effective marketing tool, with the highest, although unrevealed, click-through rate on ad campaigns, and now account for 36% of all ad impressions served through marketing firm TBG Digital.