Community portals are expensive spots for advertising

As more and more major brands start spending the money they previously spent on TV and print advertising on online ads, Facebook ads price soar by 74% compared to last year, according to new reports. This shows that companies are increasingly interested in online ads, finding an alternative to traditional advertising mediums.

An increasing number of companies show an interest in Facebook advertising services. Marketing firm TBG Digital, which has published one of the new reports, shows that the CPC of Facebook ads is now 74% higher than it used to be last year. The cost of display advertising, which is charged for each thousand ads seen, also increased, but “only” by 45% in Q2. Countries where this rise is most noticeable include the U.S., France, Germany, and the UK.

Facebook advertising has already been compared to that of Google. Simon Mansell of TBG has said that so far he has not seen growth in digital advertising comparable to that of Facebook advertising services, except of course in Google’s booming period. He added that the difference between Facebook ads and Google ads is that the interest in the former is driven by brand spend rather than response spend. In compiling its report, TBG has analyzed 200bn impressions of Facebook ads from 167 clients in the period between March and May.

Another report released by Efficient Frontier corroborates TBG’s findings. Moreover, it shows that CPC ads have become 22% more expensive in Q2 this year compared to Q1. Janathan Beeston of Efficient Frontier has said that advertising with Facebook has increased up to 80% since 2011.

Up until recently, most major brands were focusing their advertising efforts almost exclusively on traditional media. But now things are changing. In fact, an increasing number of brands actually cut their traditional media advertising budgets in order to better fund online advertising campaigns. Major companies that do this already include Coca-Cola, which has the most popular page among all companies on Facebook, with 32 million fans.

The data in the reports published by TGB and Efficient Frontier proves that Facebook’s efforts to increase its influence in the online advertising industry, in the light of the company’s impending public offering, have been successful. In the last few months the company has created a series of new ad formats and sought marketing advice from major clients. Facebook advertising services reach as many as 750 million users from all over the world.