The Battle for CTR & Conversion: Facebook News Feed Ads vs Stamp Ads

As Social Media Professionals, we all hate it when Facebook changes the Edge rank Algorithm or gives more priority to Sponsored/Paid news feed content. But in the advertising world it has done wonders in terms of Click Through Rate (CTR) for Facebook ads.

As most of us know, Facebook Stamp Ads used to get a CTR between 0.04% - 0.40%, which is much lower than Google Search CTR (typically >1.5%) and is lower than Display ads on Google where the average CTR is between 0.2%- 0.40% in most cases.

The story changed when Facebook launched news feed ads in the new ads manager UI in October 2013 as well as giving them more priority in the news feed. These news feed ads have amazing CTR i.e. between 1.5% - 6%, and I have personally witnessed campaigns where the CTR was north of 8%.

With this great improvement, one might think that all of Facebook's problems have been solved, right? Well, we have noticed a new problem with the news feed ads i.e. a low CVR !

Conversion Ratio or CVR, could be from clicks to likes or downloads in case of mobile apps, or conversion from clicks to website sales for e-commerce. In the case of Clicks to Likes, with RHS ads, we mostly experienced a CVR north of 80%.

However, in some rare cases it was as low as 60%, so essentially if 10 people clicked on your ad on Facebook, 6-9 would end up ‘Liking’ the page. With the emergence of News Feed ads, this has changed. The average CVR seen in news feed ads is less than 50%, and in lot of cases, we have seen numbers as low as 20%! If you have seen different numbers, I would love to hear from you.

Effect on Marketers

Being a marketer myself, I love News feed ads due to the size of the image and the prominence they have in a user's news feed, with the added plus being that they also let you reach Facebook mobile users.

But, it should be kept in mind that they can turn out to be very expensive if the conversion rate is low. They also have limitations, like the text content being lower than 20% of the image, which is also measured in an interesting way.

The key to having good conversion in any type of ad is having the right creative and the right targeting, but the importance of the right targeting is much higher in news feed ads. Any lapse in that will result in lot of clicks but very few likes/conversions, hence making the Cost per like or Cost per acquisition very high.

A tip here is to use Facebook’s Lookalike audience, which essentially means to target people who have similar interests to your fans. This type of audience targeting is only available through Facebook Power Editor or Ads API partners like AdSpringr.