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Facebook Encourages, Strongly, Advertisers to Link Back

That Facebook wants its user base to stay on the site for as long as possible is no secret. A new report by TBG Digital, however, shows that the site is willing to enlist its advertisers in this mission as well.

TBG Digital, found that it is 45% cheaper to buy an ad format such as Sponsored Stories or to click a Like button, compared to traditional online ads that link to the web. A previous study by TGB found that the the cost-per-click was 29% lower in the second quarter, via the Financial Times.

Leaving aside Facebook’s bias in this matter, the study offers encouraging news for Facebook advertisers.

Click through rates on Facebook ads increased by 18% from Q1 to Q4 2011 among the 5 major markets (Canada, France, Germany, UK, and the US). CTR increased by an average of 7% between Q3 and Q4 2011, bolstered by France (100% increase), but offset by Germany (18% decrease) and the US (2% decrease). In fact, France overtook all other markets in ad performance in Q4, with the US, Germany, Canada, and the UK following.

Cost per thousand impressions (CPM) rates also increased by an average of 8% between Q3 and Q4 2011 in the 5 markets analyzed, meaning that Facebook saw an increase in how much they earned per impression served in each quarter of 2011. Overall, there was an increase of 23% in CPM rates between Q1 and Q4 2011, with the US experiencing the highest rates, ahead of Canada and the UK.


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