Facebook advertising is all the rage these days. Advertisers and businesses are lining up in huge number to reach out to the 600 million strong Facebook community. So, how does Facebook make the most of this opportunity? The most obvious way is to increase the price per click to encash the increasing demand for Facebook ads.

According to figures from advertising management company Efficient Frontier, Facebook has increased the per click rate by nearly 40 percent in the last three months. The price hike is for Facebook’s self-service ads. Despite the increased prices, Facebook continues to hold forte and is still the leading choice for most advertisers.

So, should you be worried about the increasing Facebook advertising costs? Or is this a signal to jump onboard the Facebook advertising bandwagon? Or is it just another game of demand-supply and a matter of time before the Facebook advertising bubble eventually bursts?

Competition

Running a business is all about competition and how you beat your competitors. The increased demand for Facebook advertising is an ominous sign that advertisers have now matured with their Facebook campaigns. They are now smartly choosing their budget and adopting a judicious approach in allocating the funds. Since they realize the potential of Facebook ads, they are no longer shying away from shelling out a few extra dollars to get to the consumer ahead of their competitors.

Facebook user base is growing at a scorching pace, the demand for ads is growing leading to competition and it’s only set to get more intense from here on.

Revenue

An advertising campaign is as good as the revenue it generates. If you end up spending a fortune on your Facebook advertising campaign without a noticeable increase in the revenue, you need to reconsider your strategy.

Either way, Facebook stepping up the ad prices is a good indication that businesses are making good profits with their ads. If you aren’t using Facebook ads, you are missing out on a massive opportunity. If you are using Facebook ads but not getting the expected ROI, it’s a good case to learn from others.

Ad Traffic

Facebook top brass have been quiet vocal about the prospects of advertising traffic. Facebook COO Sheryl Sandberg flatly said on record that the site’s ad traffic would post phenomenal growth even as its ad prices rise. And his words are now beginning to come true.

Facebook vs. Search Engine Marketing

The Efficient Frontier report suggests Facebook advertising grew lot faster than search engine marketing which managed a 17% year-over-year primarily because of increases in the retail and finance categories.

Do you use Facebook advertising for your business? Would you continue using Facebook ads in wake of increasing advertising costs? Please share your opinion by leaving a comment below this post.