Early numbers for Facebook’s Sponsored Results, the ads launched last week that run alongside Facebook searches, could be an encouraging sign that Facebook’s strategy of building new ways of advertising to its users is working.
Nanigans, one of the Facebook performance-based marketers selling against the new unit, says that click-through rates on the ads so far have been about 23 times higher than regular marketplace ads, with some click-through-rates actually exceeding 3%, and cost per click (CPCs), at this point at least, some 78% lower than they are for Marketplace Ads.
On top of that they appear to be driving more actions, with a 14% higher install rate compared to Marketplace Ads.
That 3% CTR figure, it turns out, was the average that online ads were getting in the 1990s, a great heyday for ad-funded dot-coms.
Those numbers for the wider internet, of course, are now down to 0.1%-0.3%.
The question is whether Facebook over time will follow the same curve, and if it does, if it can keep enough scale in its operation to sustain a strong business anyway.
On the other hand, if they sustain, the numbers point to Facebook’s growing ads business, and perhaps a greater focus on its search window in the future.
There are already a number of features in Facebook’s search window: in addition to links to people and pages in Facebook, a Microsoft Bing integration gives Facebook users results from the wider web as well.
Sponsored results look similar to organic search results on Facebook, with the exception of being flagged as “Sponsored.”
As with other ads on Facebook, and as with search ads on other sites like Google, advertisers are able to buy against specific keywords. Early looks showed companies already using this to effect to appear when people searched for their competitors. The extra twist with Facebook is that advertisers can also buy against the profiles of people that will be viewing the ads, with the ads coming up based on a person’s demographic group or Facebook interests.
Nanigans says its network gets some 2 billion impressions per day and drives 2 million “performance events” like installs, registrations and purchases per day.