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Want a New Facebook Fan for Your Brand? That'll be $1.07, please.

A Webtrends study of over 11,000 Facebook ad campaigns in the U.S. revealed that when brands advertise via Facebook, the cost to gain one ‘fan’ is $1.07 and climbing. Acquiring fans on Facebook gives brands the ability to reach users in two ways: through each user’s homepage news feed (for free), and through (paid) ads that target users on Facebook.com.

Here are some highlights from the Webtrends whitepaper, which focused on Facebook campaigns geared toward fan acquisition:

  • U.S. Facebook users are becoming less likely to click on Facebook ads: the click-through rate declined from .063% in 2009 to .051% in 2010
  • Facebook ads are getting more expensive, rising from 17 cents per thousand in 2009, to 25 cents per thousand in 2010
  • The older the Facebook user, the more likely to click on these ads, up until the age of 65
  • Women are just as likely to click as men when they are 18-24, but grow more likely to click with age
  • Regardless of education level, users clicked more if an ad had a friends’ name appear at the bottom of the ad
  • Social endorsement may mean more to fans with a college background: click-through rate for fans who attended college more than doubled when ‘friend of fan’ targeting was used

Webtrends states that the drop in click-through rates and increasing ad prices are ‘a typical pattern for display ad networks as the audience becomes more savvy and demand causes prices to rise’. They recommend that brands take advantage of the current low rates to buy ads and build their Facebook fan base now, before it becomes more expensive.

Facebook spokesman Brandon McCormick told The Wall Street Journal that acquiring a fan is “just the beginning” of how marketers can use Facebook.  Justin Kistner, Webtrends’ senior manager of product marketing for social, agreed that “the campaigns that actually drive return on investment ads are usually built on top of a good fan base”.

Click here to see the Webtrends white paper, Facebook Advertising Performance Benchmarks & Insights.

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