A report recently conducted by TBG Digital has found that amidst rising costs of advertising on Facebook, brands and advertisers will experience a reduced cost per click of 45 per cent by keeping the ad destination within Facebook, as opposed to an external url. While many marketers will already practice this, as you will notice an incredibly high bounce rate when taking people outside of the Facebook platform through to your website, this research helps to prove the case and put a direct monetary value on it.
This is, according to the report, a direct result of Facebook providing advantageous cost per click rates to those advertisers who keep their traffic within Facebook. Clearly because this means more and more revenue for Facebook, as more pages are then able to serve ad impressions.
Facebook Incentivises Advertisers
Interestingly, this trend for Facebook is continuing, as in a previous report issued by TBG Digital, (Q2 2011) they found that Facebook were charging a 29 per cent lower cost per click rate for advertisers that kept clicks within Facebook. So is it the case that Facebook are needing to work harder to attract advertisers over to the platform?
Not exactly, but they are having to fight harder for ad dollars as overall advertising on the site is witnessing a steep increase. Q3 2011 to Q4 2011 saw an average of a 10 per cent rise in advertising costs. Facebook has always benefited from the fact that it can offer more social advertising than any other platform, but also that it has been cost effective when compared to the likes of Google Adwords.
Now that Facebook ads are starting to come more in line with more established online platforms or formats, they will need to work harder on their USP: the ability for advertisers to maintain a brand experience while staying inside the platform. The loss of control that brands may perceive over this can be boosted by the fact that this strategy will result in cheaper traffic compared to ads leading to their own site, and that the click through rates will be more effective, through social techniques such as showing how many friends 'Like' a Page through an ad.
Is it enough for brands?
What brands will need to consider is whether it's worth offsetting the reduced cost per click for relinquishing more control over the brand experience and the ability to convert fans. Right now there seems to be contention over which strategy is ultimately more beneficial for brands. While you may see a lower engagement rate when people are directed to your site off of Facebook, is it in fact worth keeping a smaller portion of traffic that is ultimately going to have a higher engagement rate than the majority?
100 interested customers who join you on Facebook but don't convert may not be as important to you as the one customer that will go through to your site to purchase. Reduced ad costs alone shouldn't sway the decision for you, but you instead need to look at the possible conversion options you have, how these can be facilitated through your Facebook Page and website, and which platform is offering better capability.