Facebook Advertising Budgets Doubled In 4th Quarter

Facebook advertising budgets grew 109 percent between the third and fourth quarter of 2011, compared to just 27 percent growth in paid search ad spending in that time.

The rise appears to be due to increased demand for ads driving up the bid prices on Facebook ads, as the volume of ad impressions on the social network grew at the same rate as the search sites.

These findings come from an analysis of 100 billion page views of ads served on Facebook by Kenshoo Social, which compared them with 400 billion global paid search ad impressions on search engines like Google, Bing, Yahoo, AOL, Baidu, and Yandex.

Kenshoo qualifies that the end-of-year shopping holidays do explain some of the growth spending on Facebook promotions surged three times as much as search ads did during the season.

Other key findings of Kenshoo’s analysis, adjusted for seasonality, include:

  • The overall number of views of Facebook advertising has grown 47 percent between the third and fourth quarter of 2011;
  • Facebook audiences are clicking on ads more, as clicks grew 105 percent during the same time period; and
  • Ads on Facebook have gotten more targeted since Facebook moved from EdgeRank to GraphEdge: Clicks by audiences rose 27 percent during this time.

Kenshoo’s Chief Marketing Officer of Kenshoo, explained:

Brands using Kenshoo Social to manage Facebook ads saw impressive response rates leading to large increases in advertising spend that dwarfed paid search budget growth in the fourth quarter.

We see these trends continuing in 2012 and beyond as the Facebook ad ecosystem expands and marketers get more savvy using tools like Kenshoo Social to drive tangible results.

Numbers like these certainly make Facebook look good to investors when it counts, and have similar effect upon Kenshoo’s reputation with clients.

Kenshoo’s clients include Accor, Annalect, Barnes & Noble, CareerBuilder, Facebook, Havas Digital, Hitwise, iREP, John Lewis, Kayak, LendingTree, Sears, Starcom MediaVest Group, Tesco, Travelocity Walgreens, and Zappos.

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