Facebook Mobile Ads a Hit for Investors, But What About Marketers?

Click-through rates on Facebook mobile ads are significantly higher than those of their desktop counterparts, causing many a tech publication to declare Sponsored Stories on mobile a success. It may be a bit early for marketers to buy into the hype and do a happy dance, though.

It was only a few weeks ago that Facebook launched mobile-only ads, allowing marketers to purchase them separately from web ads. Earlier this week, TechCrunch published the results of studies from TBG Digital, AdParlor, Nanigans and Spruce Media that declares:

Sponsored Stories are getting over 13 times the click-through rates and earn 11.2 times the money per impression (eCPM) on mobile compared to all of Facebook’s desktop ads, and 1.93 times the CTR and 2.65 times the eCPM of Sponsored Stories…

Well, that is fantastic news! We should all run out and switch to mobile Sponsored Stories. Not so fast…

The companies responsible for this research are a few of Facebook’s major Ads API partners. They sell Facebook ads and have a vested interest in pumping up the new mobile format. That certainly doesn’t negate their findings, though we should be cautious about what they might mean, especially given that it’s still very early days.


Another Facebook Ads API partner, SocialCode, told AdAge this week they had done some research of their own; theirs spans 12 SocialCode clients, 7 million ad impressions, and the 10-day period between June 8 and 18. Of those impressions, 242,000 were in mobile newsfeeds.

According to their research:

The click-through rate for mobile ads amounted to 0.79%, compared to the 0.148% average across all five placements studied: mobile, desktop news-feed only, desktop only (comprised mainly of right-rail ads), news-feed only (desktop and mobile) and the ‘control’ group (uniform bids made across placements).

SocialCode shows CTRs about 5 times higher and effective CPM 4.6 times higher for mobile, compared to the averages of other formats.

If you’re keeping track, so far we can expect CTRs somewhere between 5 and 13 times higher, with eCPM 4 to 11 times greater.

Mobile Facebook Ads look very promising indeed, especially to Facebook’s investors. Citing the TBG Digital study, Business Insider points out that these higher CTRs mean Facebook is raking in $9.86 per 1,000 impressions on mobile ads, compared to $3.62 on web ads.

That is fantastic news if you own Facebook stock. However, if you’re the average brand or marketer buying Facebook ads, it should mean next to nothing. Without factoring in conversion and cost per acquisition, all of these studies are hype and completely meaningless to marketers. A higher CTR may actually mean wasted budget, if paired with a lower conversion rate.

Why are users clicking, is it the novelty of something new? What happens after they click? Are users clicking because the ad takes up so much space on the mobile screen? How much is that click costing my company, and is it worth it?

Don’t confuse headlines screaming, “They Work!” with “They’ll work for my company.” They might just be the best thing since sliced bread, but it’s way too early to tell.

Mobile Sponsored Stories work in that they have the potential to generate a lot of revenue for Facebook. Hopefully they also work to convert clickers to fans or buyers, but that remains to be seen. That type of information needs to be evaluated in-house, on a client-by-client basis, with decisions based on experience, not according to aggregate data provided by the companies profiting from the sale of the ads.

Let’s not forget too that Facebook just settled a lawsuit to the tune of $10 million over Sponsored Stories, a fact that was largely overlooked in the celebratory coverage of the success of the ad format on mobile.

Facebook is pushing the limits in just about every way possible to generate the revenue they need to justify their IPO, but privacy watchdogs are pushing back. There may be changes coming to the Sponsored Stories format yet; whether they can actually be considered a success for marketers is still up for debate.

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