According to a report from Efficient Frontier, Facebook has increased the cost of advertising on the site. It’s virtual monopoly among social networks in the U.S. has led to a 40 percent jump in cost-per-click in the first quarter of 2011.
Efficient Frontier based this data on a subset of the company s client roster called the Customer Index. They handle over a $1 billion in annual marketing spending on behalf of clients like Discover, Baby Center and Crate & Barrel.
The report says that advertisers see a tremendous value in the ads, despite issues with click-through rate compared to other banner ads. Last year, Facebook served up 50 billion banner ads per month and generated $1.86 billion in advertising revenues in 2010.
The report also stated that search engine marketing grew 17 percent year-over-year, primarily because of increases in the retail and finance categories. Also display advertising showed a 300 percent increase in exchange ad inventory and a 30 percent CPM decline, attributed to greater gains in reach and efficiency within the ad exchanges.
Source: Mashable
