Google and Facebook have been tipped to further establish their dominance in the search and social media channels according to Efficient Frontier’s third quarter digital marketing performance report.
Efficient Frontier predicts Facebook will emerge as a “more significant part of marketers’ media mix” in 2011 and in the UK the balance will tip in Google’s favour as advertisers focus on return on ad spend.
The report also found mobile ad spend is increasing dramatically rising from 0.5% of total spend to 4.2% within a year with tablets taking 60% of all mobile impressions and clicks and 77% of mobile ad spend.
The evidence for Facebook’s emergence as a commercial channel comes from a 54% increase in advert cost per clicks in the third quarter of 2011 over the second quarter. Ad spend on the social networking site increased 25%.
“This indicates that advertiser competition in Facebook marketplaces is rising. Increased cost per clicks reflect both a higher volume of advertisers and more price competition on the platform,” the report states.
Looking forward to 2012 Efficient Frontier predicts cost per clicks will continue to rise 30% to 40% quarter to quarter with enhanced analytics for the site giving advertisers the ability to monetise their campaigns better.
Facebook fan engagement increased in quarter three, with likes, comments and shares per post increasing by 31% on average, and impressions per post increasing 24% on average, over the previous quarter.
Jonathan Beeston, global marketing director for Efficient Frontier, said: “Facebook is the real success story.
“Ad spend is growing and as a result, costs are increasing, but despite that, Facebook still offers great value to brands. Used well, Facebook advertising integrates to search and social engagement to give a combined result that is better than the sum of its parts.”
The UK travel industry saw a 15% increase in search spend and 5% increase in return on investment year on year while impressions on Google rose 22% and clicks were up 130%.
Improved click-through rates have resulted in an 11% decrease in cost per click, which helped improve return on investment for travel advertisers.
Beeston said: “This is likely to be the result of a combination of changes in user behaviour, more targeted and relevant ad copy, and Google’s continued efforts to make paid search look more like natural search.”
Efficient Frontier said UK advertisers will look to move spend towards Google with Yahoo Bing needing to implement its search alliance to reverse the trend, although it warns the financial crisis in Europe is likely to dampen demand.