Efficient Frontier, a digital marketing firm, based its estimate on its Customer Index, a subset of the company’s client roster. The company manages $1 billion in annual marketing spending on behalf of Crate & Barrel, Discover and Baby Center, among others.
The report predicts that Facebook ads’ CPCs will continue to rise in the double digits each quarter and increase a total of 80% this year. Marc Poirier, co-founder and CMO of
The Efficient Frontier report acknowledges as much, stating that companies spend about 5% of what they spend on search ads on Facebook advertising. However, “there are outlier brands where this rises to 25% of search spend, depending on seasonality and specific promotions.”
The report comes as several analysts have confirmed that Facebook is at the forefront of display advertising, a fast-growing category this year. Researcher IDC predicts Facebook will take the number one spot in display 2011 with $2.2 billion in sales. The growth comes despite the fact that Facebook ads have been shown to be less effective than standard banners, as measured by click-through-rates.