A new report says that Facebook’s business friendly tweaks to the social network are working, driving increased advertising ahead of the company’s rumoured IPO.

TBG has released its Global Facebook Advertising Report for the fourth quarter of 2011, which measures the performance of Facebook advertising across the five biggest markets, the US, the UK, Canada, Germany and France.

The report shows that while user growth is slowing, the US Facebook’s advertising cost per click is up 10%. TBG believes this reflects the fact that American demand and competition is increasing on the Facebook platform, as more and more brands set up dedicated advertising platforms to cater to the massive captive audience. Germany saw a similar boost.

However, the UK’s cost per click is down 11%, reflecting the fact that the market still has some room to grow. It remains among the most expensive of markets to advertise in, only surpassed by Canada in the fourth quarter.

Overall, Facebook saw 214 billion impressions in 2011, and is now making 23% more on ad rates than it did at the beginning of the year. The fourth quarter saw an 8% increase.

Overall, ad performance is up 18% across the year, which TBG claims is due to better advertising by its partners that engage customers better, and target consumers more accurately.

Facebook’s ad spends are dominated by just five main business sectors, which account for 70% of impressions: Finance (18%), Food and Drink (15%), Retail (13%), Games (13%) and entertainment (9%). The top four in the sectors in click through rates, were Food and Drink, Beauty and Fitness, Retail and Home and Garden.

Perhaps reflecting tough economic times, financial ads are now accounting for 60% of all offsite campaigns, up 50% from the third quarter of 2011. Offsite campaigns direct users out of the Facebook environment.

Facebook has been incentivising advertisers to keep their traffic within the Facebook platform, cutting ad rates to the tune of 29% if companies don’t send their click throughs to an offsite location.

An even greater advantage is if advertisers use Facebook’s own advertising applications, which reduces click through prices by 45%. TBG says more and more companies are taking advantage of these incentives.

Advertising and proof of revenue growth is vital now for Facebook as it has long been rumoured to be in the process of become a publicly listed company, expected to occur in May. The initial public offering is expected to value Facebook at about $100bn (£64.4bn), making it the biggest technology flotation in history. Facebook’s annual revenue is said to be $4.27bn.

For much of its existence social networks have proven difficult to monetise, but the last year has seen founder and CEO Mark Zuckerberg aggressively pursue advertisers, arguably at the expense of user privacy. The latest of which was a stern warning from the Irish Government before Christmas.

The findings have been vetted by the Cambridge University Psychometrics Centre.

Some Facebook Stats:
– More than 800 million active users
– More than 50% of our active users log on to Facebook in any given day
– Average user has 130 friends

– More than 900 million objects that people interact with (pages, groups, events and community pages)
– Average user is connected to 80 community pages, groups and events
– On average, more than 250 million photos are uploaded per day

– More than 70 languages available on the site
– Approximately 80% of users are outside of the United States
– Over 300,000 users helped translate the site through the translations application

– More than 350 million active users currently access Facebook through their mobile devices
– More than 475 mobile operators globally work to deploy and promote Facebook mobile products