Sponsored Results offer high CTR, low CPC and favorable conversions, Upcast says

Facebook’s  Sponsored Results search ads have up to 50 to 70 times higher clickthrough rates than standard ads on the social network, with “favorable” conversion rates and low costs per click, says social ads company Upcast Social.

Upcast has run Sponsored Results campaigns for a travel company, home improvement retailer and hotel booking service. The goal of these campaigns was to send traffic to the businesses’ pages and generate new Likes. Upcast Managing Direct Grant Muckle says that although the volume of search ads is much less than other Facebook placements, they are very successful in driving awareness and discovery with substantially lower CPCs than traditional Facebook ads. He says CPCs were one-fifth to one-eighth the costs for other placements based on tens of thousands of impressions over two to three weeks. This is in line with other results we’ve heard from companies like Nanigans and Optimal.

With Sponsored Results being such a new offering, there is little competition for most categories in the marketplace, though gaming is one area where a number of companies have begun bidding on each other’s apps and pages. Clickthrough rates are typically higher for new types of ads because users are interested to see what they are. Sponsored Results are also in a prime position to get users’ attention, often above the page or app users searched for, which could also lead to accidental clicks. In spite of this, Muckle says clicks were converting to Likes at a “favorable” rate compared to traditional Facebook ads. He says the hotel booking and home improvement retailer were especially successful in this regard. Nanigans reported that Sponsored Results have also been effective in driving app installs, with 14 percent higher install rates than marketplace ads.

As we’ve written about previously, there seem to be four approaches to search campaigns on Facebook: targeting competitors, targeting related pages, bidding on your own search terms, or bidding on the most popular apps and pages, regardless of relevance. Muckle says Upcast used the strategy of targeting competitors’ entities as well as buying an advertisers’ own keywords to defend their placement in results listings. He says running these types of Sponsored Results are a good “always on” strategy to get in front of consumers when they’re showing interest in a competitor and to ensure that a company doesn’t lose traffic to another advertiser.

For now, inventory is small because users aren’t searching for businesses on the social network as regularly as they are with traditional search engines. Many advertisers are targeting a broad range of apps and pages to get a meaningful number of impressions. Muckle says the next step is to begin to get more granular and identify which terms and which demographics perform best for each advertiser. Different industries likely have different results since the reasons for users to search for items on Facebook can vary.

“This is an ad type that all advertisers should be experimenting with and seeing what results are like,” Muckle says, noting that Sponsored Results will evolve but early adopters have an advantage. “This is something advertisers should take seriously.”

Sponsored Results are available through Power Editor and third-party providers with the Ads API badge.