In the last 12 months, the percentage of Facebook ad budgets allocated toward social ads — such as Sponsored Stories — has increased from 5% to 23%, according to analysis of user data by campaign management software firm Marin Software. By the end of the year, Marin predicts, social ads will account for nearly half of Facebook ad budgets.
The news is heartening for Facebook and potential investors, as the company prepares to go public later this month. It shows that Facebook’s special sauce — social connections — seem to be returning meaningful results for advertisers, if an increase in spending indicates campaign success.
The social ads seem to be resonating with consumers, as well. Marin says consumer engagement with Facebook social ads — as represented by click-through rates (CTR) — has also risen by 78% in the past year in the U.S. The CTR for all Facebook ads has grown by 50% in the past year.
Pricing has risen accordingly. Cost-per-click pricing has increased by 86% over the past year in the U.S., while CPM pricing has gone up by 116% in the past year.
To come up with its results, Marin looked at Facebook spend among all its users and analyzed nearly 250 billion impressions.