This article was published on January 16, 2012

Facebook rewards advertisers linking back to the social network with a 50% discount

Facebook rewards advertisers linking back to the social network with a 50% discount

According to All Facebook, the social network is encouraging advertisers to link back to Facebook pages rather than their own sites, by offering them a huge 50% discount on the ads, a figure that has continued to grow over the past year.

Using auction-based pricing, users found that Sponsored Stories which encourage users to Like a page on Facebook or install a Facebook app come a lot cheaper than linking to a site outside of Facebook.

While Google’s recently launched social search was met with a huge backlash and concerns over antitrust issues, Facebook is taking a more subtle approach in doing everything in its power to keep its users locked into the social network.

Facebook itself has already come under fire for using tactics which keep users from leaving the confines of Facebook, with Sir Tim Berners-Lee referring to the social network as a ‘Walled Garden‘.

Speaking to the Financial Times, TBG’s Chief Executive Simon Mansell describes the move as aggressive, but does go on to say, “If brands invest money coming up with campaigns that are social by design, Facebook gives them some money back in lower advertising – that feels fair to me.”

Analysing 326 billion impressions from 266 clients in 205 countries, TBG also revealed how these changes were met by its audience – the Facebook user. Click-through rates on ads rose 18% from the first to to fourth quarter, and cited the example of France, where click-through rates doubled in the last quarter after an increased use in Sponsored Stories. This could imply that users are far more interested in clicking ads that lead more Facebook and less web.

On the flip side, in the US, where Sponsored Stories have been in use for a while, the figure actually dropped by 2%. While linking back to Facebook itself might earn advertisers a discount, the cost per thousand impressions actually saw a 23% increase.

Facebook recently made a pretty big move, beginning to drop Sponsored Stories in users’ news feeds, which will likely have a positive effect on click-through rates for the coming quarter.