Marketers are rushing to put their display ads on Facebook this year. Research shops like eMarketer expect marketers to pour $6 billion into social media marketing in 2011. But marketers also face a conundrum. Are the social media ads working?  Falling click-through rates (CTR) and rising costs suggest that social media may not be the best way for marketers to reach consumers.  Part of the problem may be in how various companies are creating their campaigns. New studies show that targeting audiences generates much better results.

An eMarketer analysis on social media marketing considers recent reports that have been published about Facebook performance, globally. The data they studied, from Webtrends, shows that CTRs dropped from 0.63% to 0.51% in the past year. This drop has increased the cost per thousand impressions for marketers from $0.17  to $0.25. The Webtrends report also shows that women tend to out-click men and that  increasing age is correlated to a higher CTR, until consumers reach the age range of 55-64.

While this data is valuable, eMarketer analysts warn marketers to be wary of only looking at averages. They note “different advertisers can have vastly different click rates and costs per click.” They also point out that Facebook’s self-serve ad platform allows marketers to narrow an audience and target carefully. When advertisers take the time to target their audiences on Facebook, statistics improve.

The analysts cite new data provided by BliNQ Media which compares the outcomes of targeted versus nontargeted Facebook ads. When marketers fail to target, their CTR comes in at about 0.02%. But when they target, the rate jumps to 0.15%.

Webtrends analysts note that the average social ad has a life of between 3-5 days. To lengthen the life of an ad, analysts say marketers should turn to friend of fan targeting. Using this strategy means that  new fans, and eyeballs, are added and can increase the ad’s effectiveness for up to ten days.

With so many studies and conflicting data out on social media marketing analytics, it’s clear the marketers will be spending more time finding the right way to connect with consumers. eMarketer principal analyst Debra Aho Williamson reminds marketers to pay attention to the goals of their marketing campaigns and to develop measurement strategies that match those goals instead of falling victim to the law of averages.

[Sources: Facebook Advertising Performance Benchmarks & Insights. Webtrends.com. 31 Jan. 2011. Web 2 Mar. 2011; Targeting Boosts Low Facebook Clicks. 17 Feb. 2011. Web. 3 Mar. 2011]