How much does it cost to reach a Facebook user
-
How much does it cost to reach a Facebook user?
Facebook’s annual revenues neared $800 million last year, driven largely by self-serve ads, according to a recent report. And its active users likely number around 500 million, although the company hasn’t released official figures in four months. So how much does it cost advertisers to reach one of those users?
Naturally, not all Facebook users are created equal in the eyes of advertisers. They’re willing to pay more to reach older users than younger ones, for example. The social network doesn’t release any details on its most financially valuable demographic groups, but it does have suggested price ranges for advertisers looking to bid on ads targeting a particular demographic.
These price ranges, called “suggested bids” reflect what advertisers have most recently paid to reach the same group based on CPMs (cost to show 1,000 impressions of an ad) or CPCs (cost for every time a user clicks on an ad), and they shed some light on which types of users are more expensive to reach.
There are some trends that are pretty intuitive — the older users being more expensive to reach than younger ones, for example. But there are some counter-intuitive ones too. Japanese users, for example, are less expensive to advertise to than Russian users, even though the Asian country’s GDP per capita is more than three times as large. (That’s because Facebook’s penetration in Japan is fairly low with just 1.1 million adult users. Twitter outstrips the social network’s presence in the country by almost four-to-one based on unique visitors.)
There are, of course, a number of caveats to Facebook’s suggested bid data. The figures constantly change depending on real-time demand. They can easily fluctuate by several cents or more in either direction, so a measurement today will not be identical to one tomorrow or even an hour from now. But big discrepancies like the difference between the CPC it takes to reach an adult aged 35-44 ($1.15) and the CPC it takes to reach a teenager ($.64), aren’t significantly changed by these fluctuations.
Also, certain categories may have higher bid ranges just because there are more advertisers in that area that are comfortable working with Facebook right now. As buying ads on the social network becomes more mainstream, markets in other categories might become more competitive.
Here’s a look at some of the suggested bids:
1) Group of Eight: If you look at the G-8, Facebook users in the United Kingdom are the most expensive to reach, while Italian and Japanese users are the cheapest.
2) Emerging markets: With lower costs of living and smaller numbers of Facebook users, these countries naturally have lower suggested bid ranges. Below are the suggested bid ranges for Facebook users from the “BRICs,” or Brazil, Russia, India and China, which are considered to be the more promising emerging markets. China, which has largely blocked Facebook access, has an estimated user base of just 34,000, so its range is probably not very reliable. Brazil and India also are the remaining strongholds for Google’s Orkut social network and Facebook hasn’t made deep in-roads in either country.
3) Age: Older users are more expensive to reach than younger users.
4)Employers: Amusingly, Facebook employees are much more expensive to reach than employees of other companies like Google or Goldman Sachs Group Inc.
5) Media brands: Facebook users that are interested in or like CNBC are more expensive to reach than users who like other media brands. (Presumably, they work in finance or have lots of investable or discretionary income.)
