• by Mark Walsh  @markfwal, June 27, 2013

Facebook Exchange (FBX) retargeting ads that appear within the News Feed had a 49 times higher click-through rate than such ads on the right-hand side of Facebook pages and a rate 21 times higher than standard Web retargeting.

The findings come from a beta test by AdRoll, an early FBX partner, of 2,500 campaigns running more than 1 billion impressions during May across the Facebook News Feed, right rail and in standard retargeting. The sample spanned 547 advertisers from all industry categories with budgets from under $1,000  to over $20,000 a month.

Launched a year ago, FBX allows advertisers to retarget people on Facebook based on their browsing habits across the Web via real-time bidding. Initially, the exchange allowed only for ad placements on the right side of Facebook pages. But in May, the company also opened up news feed inventory (through Page Post Link Ads) to FBX as well.

Ads running in the News Feed overall have typically outperformed those in the right sidebar, with 10 to 20 times the click-through rate. That disparity is reflected again in the AdRoll data showing an even higher gap in the click rate between FBX ads in the news feed and sidebar. A separate early test by Facebook PMD Nanigans showed only a 17.1 higher click rate for FBX ads delivered in the News Feed than in the sidebar.

That alpha test involved only 10 million impressions and was conducted prior to Facebook opening testing more widely on May 6 to other qualified DSPs, including AdRoll. Among other findings from the new AdRoll study:

-News Feed cost-per-click (CPC) rates were half that of right-hand side (RHS) campaigns and one-fifth that of Web retargeting.

-News Feed grew from 0% of our overall clicks to 15% in one month.

-News Feed and RHS complement one another and result in an overall increase in clicks at a combined lower CPC.

-News Feed alone doesn’t have the reach or scale of RHS or standard Web, and should be used in conjunction with the other channels.

“Social elements (like, comment, and share) make it even more ideal for direct response marketing, providing even greater potential for viral distribution,” noted AdRoll CEO Adam Berke, in a blog post today. “ In essence, retargeting in the News Feed combines four important campaign success metrics: prominence (News Feed), precision (retargeting), direct response (via links), and impactful engagement (social).”

During Facebook’s first-quarter conference call, COO Sheryl Sandberg noted that by the beginning of the quarter, AdRoll had already reallocated 63% of their total impressions to Facebook based on its results with FBX. Adding News Feed inventory could boost its share of the display ad market.

Facebook’s share of U.S. digital display advertising is already projected to increase to 15.5% this year from 14.6% in 2012, according to an eMarketer forecast. That would make it second only to Google, with an expected 17.6% share in 2013.