TBG Digital: Mobile drives increased Facebook ad rates

Cost per million impressions (CPM) for Facebook ads increased 58% since Q2 last year, thanks largely to mobile ads, according to TBG Digital’s Q2 2012 “Global Facebook Advertising Report” released July 18.

In the U.S., the study says that CPM increased by 25% between Q1 and Q2, 2012.

“Price is going up, which means demand is still rising,” says Simon Mansell, CEO of TBG Digital. “In order to continue this growth, however, companies like TBG will need to solve the measurement challenge.” That means learning now to accurately measure ROI on Facebook ads, he says.

The quarterly study was based on 406 billion worldwide impressions, TBG said in a statement. Sponsored stories—updates that suggest a user  “like” what his or her friend does—and mobile ads have seen an increase in use, the study says.

Mansell says he was surprised by the increased use of sponsored stories. “I would have expected that to decline, but they’re performing better than when they were launched.”

According to the company’s Q1 2012 report, released April 16, Facebook’s average CPM increased 41% year-over-year. After the Q1 study was released, Mansell noted that much of the growth was coming from the retail sector. In Q2, he says, much of the growth is coming from Facebook’s new mobile ads.

“It means that mobile can’t be an afterthought anymore,” Mansell says. “Any experience you create for consumers needs to work on mobile devices.”

Facebook declined to comment on the report.

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