Facebook news feed ads have shown impressive ROI figures in a recent study by Marin Software.

The study found that news feed ads in Q3 2013 displayed 44 times higher CTR and 5x increase in conversion rate when compared to the ads that appeared on the Right-Hand Side (RHS) of Facebook. The news feed ads not only outshone RHS ads, they also have a 67% lower CPC.

Marketers have noticed the high performance levels of news feed ads. Marin Software found that marketers increased their news feed ads spend by 140% in the same quarter.

News Feed Redesign & Native Advertising

Facebook’s recent news feed redesign may have had a hand in boosting the performance capabilities of news feed ads.

As the news feed became more visual-oriented post the redesign, the news feed content requirements for brands also changed; thereby also affecting news feed ad content and probably, their performance. The current emphasis on visuals in digital marketing is also a catalyst here.

Another factor that probably is in play is that the Facebook newsfeed is a great platform for native advertising.

Advertisers can subtly slip their messages into the viewers news feed and the better targeted and more attractive these messages are, the greater the chance of them being clicked on.

Marketers, do take note of this!

Excellent Performance by Facebook Mobile Ads

With more and more consumers accessing Facebook through their mobile, marketers are opting for mobile-only campaigns on Facebook. Marketers also seem to recognize that Facebook users behave differently while accessing the site via mobile and computer, and are segregating their Facebook budgets between these two.

Between Q2 and Q3 2013, 45% more marketers chose mobile-only ads. The reason for this is clear when you see these stats: mobile-only news feed ads outperformed desktop ads with 187% higher CTR and 22% lower CPC.

This rise in choice of mobile-only ads can also be expected to increase due to the separation of ad buying options by Facebook due to which, marketers can now buy only desktop or mobile ads. Given that marketers may have different objectives while advertising on mobile and desktop, this was a good option that was provided.

Facebook Custom Audiences Tool Adoption Increases

Facebook’s Custom Audiences tool, which was launched in March 2013, has seen widespread adoption by brands. It’s not surprising given that it offers marketers better targeting options than the broader options available earlier. Sharper targeting through Custom Audiences should in turn lead to better conversion and lower CPC rates.

And it has.

82% more marketers used the Custom Audiences tool in Q3 2013 compared to Q2. This looks like a trend that will continue given the results they have got.

Ads that used the Custom Audiences tool had conversion rates 3.87 times higher than ads with only demographic or category-based targeting. These ads also showed a 14% lower CPC and 64% lower cost-per-conversion than category or interest-based targeting.

Facebook advertisers seem to be hitting the gold mine with Facebook’s ad products. What do you think they are doing right? What can Facebook do to make its ads better