©IDG Communications, Inc. Photo contributed by Matthew Mikaelian.
With Facebook having recently released its IPO the question being asked now is whether or not it can beat Google and their ever popular Adwords. Without a doubt Facebook is an extremely popular social networking site and still continues to grow. However one thing that has continued to plague Facebook are its ads. The site continues to grow in popularity but only had an ad click through rate of .05% in 2010 compared to Google’s .4% it is not that good, especially considering it is under the U.S. average click through rate of .1%. For those of you who don’t know the clickthrough rate or CTR is essentially the ads popularity. It is calculated by dividing the number of clicks on an ad divided by number of times it is shown.
In quarter one of 2012 it is reported advertising rates increased by 40% while clickthroughs fell 8%. Before investing in ads with Facebook just consider clickthrough rates decline by about half after they have been released for a day or two.