Study: Facebook Ad Click-Throughs Declining

Click-through rates on Facebook ads only averaged 0.05% in 2010, down from 0.06% in 2009 and well short of what’s considered to be the industry average of 0.10%. That’s according to a Webtrends report that examined 11,000 Facebook ads, first reported upon by ClickZ.

Meanwhile, the price of those clicks is increasing, rising from $0.27 in 2009 to $0.49 last year. The lower click-throughs and cost increase occurred at a time when Facebook’s top advertisers have increased their spend tenfold, according to the Webtrends study.

A friend being a “fan” of the ad was one factor that increased ad performance. “Friend-of-fan” targeting increased click-throughs across the board, but the impact was especially significant among those who attended college. Those who attended college are twice as likely to click if a friend was a fan, suggesting that social influence is stronger among college attenders than among those who didn’t attend.

Friend-of-fan targeting could also combat rapidly-staling ad creative, Webtrends found. In most cases, ad burnout came quickly — after three to five days — because, unlike search ads, they are being targeted to individual people. Friend-of-fan targeting helped with this, possibly because the ad gains fans over time, therefore widening the pool of people — friends-of-fans — exposed to it.

Click-Through Rates Over Time with Friend-of-Fan Targeting

Another factor that impacted performance was the category of the advertiser. Since many Facebook users are visiting the site to entertain themselves, brands in categories likely to provoke discussion — media & entertainment, along with tabloids & blogs — had the highest click-through rates.

Webtrends also found age and gender affecting performance. People that were older — up until age 65 — were more likely to click on ads. When they’re between 18 and 24 years old, women and men are equally likely to click, but women’s propensity to click was greater if they were 25 and older.

Geography (within the U.S., at least) had little impact on click-through rates, although North Dakota and Wyoming showed higher-than-average click-through rates and Hawaii showed lower.