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Why Retailers Are Turning to Facebook for the Holidays

The 2012 holiday shopping season is here with Black Friday right around the corner, and analysts are predicting an increase in sales from online shopping. Shop.org estimates online retail sales will grow by 12% from last year’s holiday shopping season, reaching between $92 and $96 billion in the United States.

Economists often refer to back-to-school sales as an indicator of how the year’s holiday sales will perform. This year IBM found that social networks drove considerable back-to-school sales, with social sales increasing 70% in August when compared to last year. Facebook led the charge, bringing in 80% of all traffic to retailer sites from social networks in July and 78% in August.

With over a billion people worldwide on Facebook, it’s no wonder retailers are turning to the social network to engage with their customers, drive traffic to their retail websites, share promotions, get the word out about new products, and much more. Facebook plays a significant role in online shopping, with Shop.org citing that one-third of online shoppers consult the social network for product reviews, recommendations, and offers for both in-store and online shopping.

survey conducted in October revealed that 86% of retailers planned to use Facebook for holiday promotions. In fact, retailers like The Home Depot, TargetL.L Bean and many more have already hinted at seasonal marketing campaigns on Facebook.

Last year we saw an increase in demand for Facebook ads during the holiday shopping season, and we are beginning to see similar trends this year. In our holiday trends study last year we charted the steady increase in average CPCs (cost-per-clicks) from before, throughout, and after the holiday season. At the end of December, CPCs normalized and resembled averages prior to the 2011 holiday season. From lowest to highest points this represented an 80% increase in CPCs, and suggests that retailers with cost sensitivities should front-load their holiday ad spend.

With new Facebook ad products like custom audience targetingFacebook mobile ads and Facebook Exchange, Facebook presents a huge opportunity for retailers aiming to reach potential customers. We look forward to helping our customers maximize the potential of these ad products during this year’s holiday shopping season.

Are you running holiday campaigns on Facebook? Let us know in the comments!

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