Facebook's ad incentives improve performance

TBG Digital's recent report, Global Facebook Advertising Report, Q4 2011, revealed that Facebook began offering discounts to local internet marketers in an attempt to retain their business.

Specifically, Facebook offered advertisers a cost-per-click discount of 45 percent during the fourth quarter of 2011 as long as user clicks were redirected to company Facebook pages or applications instead of their own, off-site websites.

"The potential cost savings available by maintaining traffic within the Facebook environment is particularly compelling and demonstrates its effectiveness as an advertising channel and also as a 'destination,'" said TBG CEO Simon Mansell.

ZDNet points to an example of a financial services firm which directs users back to their sites to complete transactions for sign up for some sort of bill pay. If that bank built a Facebook app that performed similar functions, it would save on advertising costs.

Researchers also found that over the course of the fourth quarter, cost per thousand impressions - the amount Facebook earns every time an ad is shown to a user - increased by an average of 8 percent. In total it earned 23 percent more in ad rates since 2011's first quarter, and saw ad performance improve by 18 percent.