TBG Digital: The average CPM of Facebook in Q4 2011 was 22 cents, an increase of 8% from the previous quarter

On January 17, 2012, TBG Digital, an independent marketing company focusing on social media, released a report today showing that Facebook's advertising business is still growing, with its cost per thousand ad impressions (CPM) increasing by 8% in the fourth quarter from the previous quarter and 23% from the first quarter of 2011.

The following are some key data from the report:

Facebook's CPM increased 8% in the fourth quarter from the previous quarter and 23% from the first quarter of 2011. However, Facebook's average CPM worldwide is only 22 cents, much lower than portals and premium websites.

Cost per click (CPC) grew just 1% in the fourth quarter, although in the US it grew 10%.

The average click-through rate of ads increased 7% quarter-on-quarter and 18% year-on-year in the fourth quarter. This shows that Facebook's targeted measures are paying off. TBG said that Facebook's sponsored stories received more clicks. But Facebook still does not attach importance to click activities, preferring to use browsing and engagement activities that it believes are more beneficial to brand advertisers.

Finance, retail, food, gaming and entertainment account for 68% of Facebook’s total ad impressions.

To amass users, or get advertisers to install an app that keeps them on Facebook rather than sending traffic to other sites, Facebook offers advertisers attractive incentives: The company gives advertisers a 45% discount on the cost per click if they don't leave its platform.

However, TBG excludes advertising revenue from games in its calculations. Facebook's advertising revenue is likely to still rely on Zynga.

If the social network is heavily reliant on social games for advertising, some investors may have reason to hesitate about its IPO. Zynga has often said it wants to avoid over-reliance on the Facebook platform, and if Zynga accounts for a large portion of Facebook's advertising revenue, investors may be more hesitant. The exact truth will not be clear until Facebook's S-1 filing is released. If Facebook plans to go public in May, its S-1 filing will probably be released next month.