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Facebook Sponsored Stories
Click Through Rates (CTR) and Cost per Click (CPC)



                           Dr. Augustine Fou, Founder
                           Marketing Science Consulting Group, Inc.


December 10, 2012                                                     1
Sponsored Stories
 Initial tests are performing well, but …

                                                  Source: TBG
                                                  Digital July 2012




 “Relying on tricking users into clicking ads in friends' feeds
 (Sponsored Stories) is not a sustainable revenue growth strategy.”
December 10, 2012                                                     2
Facebook ad types
               Post Ad CTR is 0.07% CPC is $0.24

               Sponsored Story CTR is 0.07% CPC is $46

               Web Ad CTR is 0.03% CPC is $0.59

               Social Ad CTR is 0.04% CPC is $0.78



December 10, 2012                                        3
Facebook mobile ads have
higher CTR …




        … but could be due to users closing ads.
December 10, 2012                                  4
Facebook Mobile



           Source: TechCrunch, June 19, 2012


 Mobile ads are more effective from initial numbers; but
 lower pageviews per session and lower ads per page will
 mean less revenue per user on mobile
December 10, 2012                                          5
Targeting Premium? No.
  • More social parameters to use for targeting means
    higher premium for ads?

  • How will users react to FB using more of their personal
    data for targeting of ads?

  • So far, despite the greater use of demographic info for
    targeting, FB CPMs still lag the industry dramatically.


                    = more revenue for FB?
December 10, 2012                                             6
FB Default Privacy History

     December 10, 2012




Source: http://mattmckeon.com/facebook-privacy/

 … has already maxed out revealing more
  user info to the public (i.e. advertisers)
Benchmark - ARPU
         AMZN EBAY GOOG         YHOO    BIDU   FB
           183      15   18      18      31    91   P/E ratio

                                                    Facebook revenue
                                                    per user - $4 – is
                                                    lowest compared
                              GOOG - $24 /user      with other tech
                              YHOO - $8 /user       companies like
                                                    Amazon, eBay, Goog
                              FB - $4 /user         le

                                                    But FB’s P/E is
                                                    91, which is among
                                                    the highest

December 10, 2012                                                        8
Revenue per Time Spent
      LNKD              $1.30 per user/hour   Source: Forbes, July 26, 2012

      GOOG              $0.35 per user/hour

      FB                $0.06 per user/hour

      HBO               $0.28 per user/hour
      Financial Times   $3.66 per user/hour

   Facebook is LEAST efficient at monetizing users’
   time spent, despite “theoretical” targeting advantage.
December 10, 2012                                                             9
Dr. Augustine Fou – Chief Digital Strategist
 “I analyze trends and advise
 clients on getting out in front
 of them, rather than be a
 victim to them.”
 FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM)
 MCKINSEY CONSULTANT
 CLIENT SIDE / AGENCY SIDE EXPERIENCE
 PROFESSOR AND COLUMNIST
 ENTREPRENEUR / SMALL BUSINESS OWNER
 PHD MATERIALS SCIENCE (MIT '95) AT AGE 23


ClickZ Articles: http://www.clickz.com/author/1151/augustine-fou
Slideshares: http://www.slideshare.net/augustinefou
LinkedIn: http://www.linkedin.com/in/augustinefou


  @acfou                                                           Augustine Fou

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Facebook Sponsored Stories CTR and CPC by Augustine Fou

  • 1. Facebook Sponsored Stories Click Through Rates (CTR) and Cost per Click (CPC) Dr. Augustine Fou, Founder Marketing Science Consulting Group, Inc. December 10, 2012 1
  • 2. Sponsored Stories Initial tests are performing well, but … Source: TBG Digital July 2012 “Relying on tricking users into clicking ads in friends' feeds (Sponsored Stories) is not a sustainable revenue growth strategy.” December 10, 2012 2
  • 3. Facebook ad types Post Ad CTR is 0.07% CPC is $0.24 Sponsored Story CTR is 0.07% CPC is $46 Web Ad CTR is 0.03% CPC is $0.59 Social Ad CTR is 0.04% CPC is $0.78 December 10, 2012 3
  • 4. Facebook mobile ads have higher CTR … … but could be due to users closing ads. December 10, 2012 4
  • 5. Facebook Mobile Source: TechCrunch, June 19, 2012 Mobile ads are more effective from initial numbers; but lower pageviews per session and lower ads per page will mean less revenue per user on mobile December 10, 2012 5
  • 6. Targeting Premium? No. • More social parameters to use for targeting means higher premium for ads? • How will users react to FB using more of their personal data for targeting of ads? • So far, despite the greater use of demographic info for targeting, FB CPMs still lag the industry dramatically. = more revenue for FB? December 10, 2012 6
  • 7. FB Default Privacy History December 10, 2012 Source: http://mattmckeon.com/facebook-privacy/ … has already maxed out revealing more user info to the public (i.e. advertisers)
  • 8. Benchmark - ARPU AMZN EBAY GOOG YHOO BIDU FB 183 15 18 18 31 91 P/E ratio Facebook revenue per user - $4 – is lowest compared GOOG - $24 /user with other tech YHOO - $8 /user companies like Amazon, eBay, Goog FB - $4 /user le But FB’s P/E is 91, which is among the highest December 10, 2012 8
  • 9. Revenue per Time Spent LNKD $1.30 per user/hour Source: Forbes, July 26, 2012 GOOG $0.35 per user/hour FB $0.06 per user/hour HBO $0.28 per user/hour Financial Times $3.66 per user/hour Facebook is LEAST efficient at monetizing users’ time spent, despite “theoretical” targeting advantage. December 10, 2012 9
  • 10. Dr. Augustine Fou – Chief Digital Strategist “I analyze trends and advise clients on getting out in front of them, rather than be a victim to them.” FORMER CHIEF DIGITAL OFFICER, HCG (OMNICOM) MCKINSEY CONSULTANT CLIENT SIDE / AGENCY SIDE EXPERIENCE PROFESSOR AND COLUMNIST ENTREPRENEUR / SMALL BUSINESS OWNER PHD MATERIALS SCIENCE (MIT '95) AT AGE 23 ClickZ Articles: http://www.clickz.com/author/1151/augustine-fou Slideshares: http://www.slideshare.net/augustinefou LinkedIn: http://www.linkedin.com/in/augustinefou @acfou Augustine Fou