Facebook continues to emerge as a significant part of the marketing mix, with Facebook ad spend increasing 25% during the third quarter of 2011, and the cost of Facebook advertising also rising.

According to the latest report from performance marketing company, Efficient Frontier, Facebook ad cost-per-clicks (CPCs) is up 54% in Q3 compared with Q2, while search spend has risen by 16% year-on-year in the UK – compared with 20% percent in the US.  These findings suggest that Facebook has become an essential marketing channel for many brands – and that advertiser competition in Facebook marketplaces is rising. As a result, Efficient Frontier’s Global Digital Marketing Performance Report for this quarter predicts that Facebook ad prices will continue to rise between 30-40 percent quarter on quarter.

Jonathan Beeston, Global marketing director for Efficient Frontier, says, “Facebook is the real success story. Ad spend is growing and as a result, costs are increasing, but despite that, Facebook still offers great value to brands. Used well, Facebook advertising integrates to search and social engagement to give a combined result that is better than the sum of its parts.”

The 25% increase in ad spend indicates that advertisers can see the value in significantly increasing their investment in social media.  Many are employing strategies that contribute to the growth in spend – such as maximising fan reach with Sponsored Stories and acquiring new fans via Facebook ads. Some 84% of Facebook fan engagement  (Likes, Comments and Shares) is attributed to Likes, which in turn are credited to Facebook advertising, and overall engagement per post is said to have increased in Q3 by an average of 31%.

Meanwhile, brands are increasing their fan base by 9% each month, doubling their fan base year on year.