How effective are Facebook Fan Ads?

You may have seen some Facebook ads whose objective is to build fan base for the advertiser.
The advertiser can be a Facebook marketer, some blogger or some business, who is showing that ad to build the fan base for his/her respective brand.

A question which most people ask is – How effective are these Facebook Fan ads?

I think it’s best to present this metric in terms of money; or How much a fan costs to an advertiser on Facebook?

According to a whitepaper by analytics firm Webtrends, which studied 11,000 Facebook ad campaigns in the U.S. ; the cost of advertising on Facebook that encourages a user to become a “fan” on the brand’s Facebook page is $1.07.

But, WebTrends underlines that this cost is on a RISE.

As, the rates at which U.S. users are clicking on Facebook ads designed to generate fans are starting to decline. For every 1000 times an ad is shown, Facebook users are clicking 12 clicks less in 2010, what they clicked in 2009. In other words, while in 2009, the so-called click-through rate on such ads was .063%. In 2010, the rate declined to .051%.

At the same time, ads are getting more expensive, rising from 17 cents per thousand in 2009, to 25 cents in 2010. (By comparison, display ads can range from $2 to $8 per thousand on other sites, depending on the site and the type of advertiser.) --------

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