Facebook Advertising Trends: CPCs Increased 80% During the Holidays

Online retail sales reached a new $37.2 billion record high this holiday shopping season. That’s up a sizable 15% from 2010.

With social networks cited by consumers as their leading online shopping portal (topping both retail and comparison sites), it’s no surprise that many advertisers turned to Facebook this year to place ads and take advantage of the social network’s 800 million active users, engagement and targeting parameters.

The result of this increased demand for Facebook ads was higher cost per clicks (CPCs). It is a trend we saw over the course of November and December, with over 80% higher CPCs during peak holiday shopping season (just featured on ReadWriteWeb):

Holidays Are for Sharing: The Power of Facebook, Courtesy of Fab.com and Levi’s

Retail e-commerce sales reached new highs during the holiday shopping season last year. Record setting online sales on Black Friday and Cyber Monday point to even greater and new highs this year.

With shoppers citing social networks as their leading online shopping portal, it’s no surprise that 25% of retailers report their most effective online ad techniques are on social networks (third to dynamic optimization (28%) and retargeting (26%) – both of which can also be done on Facebook).

Fab.com and Levi’s are two retailers who have benefitted tremendously from Facebook this holiday shopping season. These sites have not only attributed a large fraction of referral traffic from Facebook, but a considerable portion of their sales and revenue:

Fab.com

One of the fastest growing and hottest flash sale sites on the web right now, Fab.com has relied heavily on Facebook advertising for new user acquisition and to generate awareness for new flash sales and products. Their CEO recently released results from the shopping period from Black Friday through Cyber Monday: 25% of Fab’s $1.1M in sales were attributed to people who originally joined the site from Facebook.

“Without a doubt, Facebook is far and away our most important source for both new members and for ongoing engagement of our members.” –Jason Goldberg, Founder & CEO.