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In Advance of Facebook's Q4 2012 Earnings Call, Spruce Media Releases State of Facebook Advertising Report 2012

Facebook Advertising Solutions Provider Offers an Inside Look at the State of Advertising on the Social Network in 2012 and Offers Predictions for 2013

SAN FRANCISCO, CA -- (Marketwire) -- 01/29/13 -- Spruce Media (www.sprucemedia.com), the leading provider of enterprise-class marketing solutions for Facebook Ads, today announced the public release of the Spruce Media State of Facebook Advertising Report.

In this latest report, Spruce Media provides statistics and trends analysis on key campaign performance metrics including cost per thousand impressions (CPM), click-through rates (CTR), and cost per click (CPC), and also offers its take on the social network's advertising products, including mobile application install ads, view tags, and its newly introduced graph search.

Highlights in the report include the following:

  • In Q4 Spruce Media saw Brand Advertisers shift budgets from low CPM placements (right-hand-side) into high CPM placements (Newsfeed), coupled with widespread adoption of Facebook Exchange to backfill lower CPM placements, this makes us very positive on Facebook's Q4 revenue.
  • Newsfeed CPM's increased further in Q4 showing increased competition in the Facebook Ad Market.
  • Newsfeed mobile CPM is down 10% from Q3 to Q4, this could be due to increased inventory with iPhone 5, iOS 6 and Facebook's ramp of eligible device impressions.
  • Desktop Newsfeed CPM is up 34% to Q4 showing sustained inventory volume with increased competition for the ever-valuable newsfeed impressions during the holiday season.
  • Newsfeed CTRs in Q4 continued to rise showing a clear improvement in Facebook's ad formatting and ad serving algorithm.
  • The 34% increase in CTR on this placement shows that Facebook has been able to improve the formatting and relevancy of ads delivered in their mobile applications confirming Facebook's ability to focus on both user experience as well as revenue building product development.
  • The 33% drop in Mobile Newsfeed CPC from Q3 to Q4 further opens Facebook up to the $1.6+ Billion industry of mobile ad network advertisers who currently pay very low CPC rates.
  • In Q4, Spruce Media found that Ads served on Desktop Newsfeed cost an average of $0.24 per engagement. Ads served on Mobile Newsfeed cost as average of $0.76 per engagement within 28 days. While Spruce Media found that Mobile Newsfeed is extremely effective at driving immediate engagement of liking a page, liking a post and viewing that specific piece of content; further browsing or other page content after the initial engagement is more likely to occur on desktop.
  • Facebook's first deposit against serving direct response advertisers on Mobile is their Mobile App Install Ad. Spruce Media's data on this ad unit so far shows an average cost per click of $0.39 and an average cost per install of $0.97, numbers which fall right into the strike zone of your average mobile application advertiser.

The report also covers Facebook Predictions for 2013, including insights for Facebook Graph Search:

  • Facebook had an extremely productive 2012 and has shown the market that they have a commitment to developing innovative advertising products that provide a better user experience. Ending 2012 and going into 2013, Spruce Media sees Brands continuing their Facebook investment from being a "let's try this out" to a "must-buy" to now, being a "how do we strategically develop a media plan that accomplishes our goals." Seeing the incredible engagement metrics from getting content into the Desktop Newsfeed makes developing strategies to 1.) Get into the Newsfeed and 2.) Stay in the Newsfeed, critical now more than ever.
  • Facebook's recent announcement of Graph Search (a revolutionary new way to discover people, places and things) could make a great addition to Newsfeed for Brand Marketers. Similarly to "getting into the Newsfeed" the only way to "get into search results" is to have relevant and engaging content, therefore Graph Search is just another reason that brands should employ smart paid media strategies and continue investing on Facebook. In addition to brand marketers investing in Graph Search inventory, this new "demand fulfillment" inventory will attract advertisers to Facebook who haven't yet spent any dollars.
  • Facebook has made significant progress on product adoption and doesn't show signs of slowing down in 2013. This brings about a huge opportunity for advertisers that are embracing the social media giant and big challenges in navigating Facebook marketing strategy. Humanizing advertising is a very exciting world that Spruce Media looks forward to Facebook continuing to develop.

About Spruce Media:

Spruce Media is the leading provider of enterprise-class marketing technology that delivers real results at scale, and drives consumers from likes to influence for the most successful advertisers, agencies, and trading desks on Facebook. Recently named one of 12 Facebook Strategic Preferred Marketing Developers, the highest distinction of excellence offered, Spruce has pushed over 300-billion impressions through its software and is the technology of choice for the largest advertisers on Facebook. Founded in 2010, Spruce has developed a robust solution integrating ad creation, bid management, analytics, and reporting into one easy to use, yet powerful interface, which can be licensed or coupled with managed services. Spruce Media is based in San Francisco and has sales offices in Los Angeles, Dallas, Chicago, Minneapolis, Washington D.C., and New York.

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Harrison Wise
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