Social Advertising Quarterly Report

Transcription

1 1 Social Advertising Quarterly Report Socialbakers Quarterly Ads Benchmark Reveals News Feed Ads Dominate CTRs and Share of Spend # SOCIAL MEDIA LIKE # SHARE

2 2 1. Introduction Social advertising continues to grow at a rapid rate, with the majority of that growth coming from Facebook. Now, 92% of social marketers report that they are using Facebook for advertising. Facebook is a powerful advertising platform, but there are some who still debate its value for brands. Although a lot of writing focuses on claims that Facebook s organic reach is declining in favour of paid ads on the platform, most brands find that Facebook advertising is highly efficient and generates long term ROI. This report will take a look at Facebook advertising in detail to showcase what has changed from Q2 213 through Q In this report you will learn Which Facebook ad placements and types work the best Average KPIs by industry Average KPIs by region Forecast on Facebook Q1 quarterly earnings for advertising

3 3 1.1 Methodology We ve pulled together data from the Socialbakers Ad Analytics tool, industry data, and Facebook quarterly reports to present our quarterly Facebook advertising report. Data has been analysed from April March 214 for verticals, and April February 214 for all other sections. We have looked at more than 2, advertising accounts and aggregated their performance (impressions, spend, clicks) into ad types, placements, regions, and verticals. 1.2 KPI Definitions Click-Through Rate (CTR) Number of clicks divided by number of impressions per ad. Example: If the CTR of an ad is 1%, that means that 1% of everyone who saw the ad clicked. Cost per Click (CPC) Total cost divided by number of clicks per ad. Cost per Impression (CPM) Total cost divided by number of impressions per ad, multiplied by 1. Example: A business may have bought 1, impressions at a CPM of $5, meaning they spent $5. 2. Ad Placements Determining the right ad placements is crucial for increasing the effectiveness of your ads. Why? Certain types of ads perform better in general - such as ads in News Feed- while others work better based on the content that is distributed. Here is a quick list of the six different types of ad placements that advertisers can choose from when setting up an Ad Set: All Facebook - Will create variations for every type of ad placement News Feed (Desktop and Mobile) News Feed (Mobile) Desktop - Will create 2 variations (News Feed Desktop and Right-Hand Side) News Feed (Desktop) Right- Hand Side

4 4 2.1 Here, we look at CTR and the breakdown of ad placement effectiveness:,3 %,25 %,2 %,15 %,1 % All Facebook Desktop News Feed (Desktop and Mobile) News Feed (Desktop) News Feed (Mobile) Right-hand Column,5 % 213_Q2 213_Q3 213_Q4 214_Q1 As one would expect due to time spent in News Feed, CTRs on the News Feed are much higher than the right-hand column, and mobile ads dominate desktop ads in terms of clickthrough rate. News Feed ads are growing quarter-on-quarter, with mobile increasing it s dominance from Q3 213 through to Q Below, you can see how advertisers adjusted their ad placement preferences by taking a look at the quarter-over-quarter spend. Note the decline in the All Facebook placement: All Facebook Desktop News Feed (Desktop and Mobile) News Feed (Desktop) News Feed (Mobile) Right-hand Column 1 % 9 % 8 % 7 % 6 % 5 % 4 % 3 % 2 % 1 % 213_Q2 213_Q3 213_Q4 214_Q1 This shift in ad placement spend shows the changing attitudes of advertisers. Interestingly, mobile News Feed lost share slightly to News Feed on desktop and mobile, although this may be due to advertisers increasing their post boosting efforts, with the default targeting option being to target both desktop and mobile.

5 5 2.3 Next, we look at CPC and CPM of each ad placement,25 %,2 %,15 %,1 %,5 % CPC All Facebook Desktop News Feed (Desktop and Mobile) News Feed (Desktop) News Feed (Mobile) Right-hand Column 213_Q2 213_Q3 213_Q4 214_Q1 3,5 % 3 % 2,5 % 2 % 1,5 % CPM All Facebook Desktop News Feed (Desktop and Mobile) News Feed (Desktop) News Feed (Mobile) Right-hand Column 1 %,5 % 213_Q2 213_Q3 213_Q4 214_Q1 The graphs show that CPCs and CPMs are much lower on ads that are targeted to All Facebook, with the most expensive being News Feed placements. The reason these are often more expensive in terms of CPC and CPM is due to higher competition - more posts are promoted in fewer ad slots available compared to the right-hand column placements. News Feed mobile placements have seen an upward trend in terms of CPM since Q2 213, however, they have declined slightly this quarter. The right-hand column ads have seen a marked decrease in terms of CPC over the past year as their competitiveness begins to decline.

6 6 2.4 Ad Placement Takeaway In terms of ad placement, the key takeaway for advertisers is that News Feed Ads are starting to dominate in terms of ad spend and CTRs, and as a result CPCs and CPMs are higher for these prized slots. 2.5 Suggestion We recommend that advertisers focus their attention on News Feed. This is a more competitive environment for a reason - the potential here is bigger. News Feed Ads attract higher levels of user interaction due to their prominence. 3. Advertising Type We ve also studied ad types, including App ads Event ads Mobile app install ads Page Like ads Page Like sponsored stories Page post sponsored stories Sponsored Stories

7 7 3.1 The first data point shows the CTR of each of these ad types,25 %,2 %,15 %,1 %,5 % 213_Q1 213_Q2 213_Q3 213_Q4 214_Q1* App Ad Mobile App Install Ad Page like Ad Page Post Sponsored Story Event Ad Open Graph Sponsored Story Page Like Sponsored Story The CTR on mobile app install ads has dropped greatly over the last year, but they are still higher than most. At present, Page post sponsored stories are seeing the highest CTRs. App and event ads have a very small CTR compared to the other formats. 3.2 Share of spend has increased on Page post sponsored stories with the increase of these types of ads as more mobile inventory has opened up over time. 1 % 9 % 8 % 7 % 6 % 5 % 4 % 3 % 2 % App Ad Event Ad Mobile App Install Ad Open Graph Sponsored Story Page Like Ad Page Like Sponsored Story Page Post Sponsored Story 1 % 213_Q1 213_Q2 213_Q3 213_Q4 214_Q1

8 8 3.3 In terms of CPC and CPM for various ad types, Page post sponsored stories (which are predominantly News Feed Ads) have the lowest CPC of any of the ad types, but higher CPMs than all but the mobile app install ads.,3 % CPC,25 %,2 %,15 %,1 %,5 % 213_Q1 213_Q2 213_Q3 213_Q4 214_Q1 3,5 % CPM 3 % 2,5 % 2 % 1,5 % 1 %,5 % 213_Q1 213_Q2 213_Q3 213_Q4 214_Q1 App Ad Mobile App Install Ad Page like Ad Page Post Sponsored Story Event Ad Open Graph Sponsored Story Page Like Sponsored Story Mobile app install ads had the highest CPM and CPC across the board, although this decreased in the latest results. CPC and CPMs stayed at relatively similar levels between Q1 213 and Q1 214.

9 9 3.4 Takeaway Ad Types Sponsored stories are being removed from the advertising system as Facebook is streamlining its advertising offerings (Page post and Page Like ads already automatically have the best social context added), and we feel this is a positive thing. Page post sponsored stories at present have the highest CTR, the highest share of spend, and the lowest CPM and CPCs. Despite the removal of the format of sponsored stories, ads with social context will still exist across all ad variants as noted above. 3.5 Suggestion As with the placement section, this leads to the recommendation that advertisers should focus their attentions on News Feed as these placements are more cost effective and achieve higher response rates. 4. Region We ve looked at the world of Facebook advertising on a regional basis, covering 5 defined regions Europe JAPAC LATAM North America Rest of the World We ve studied the differences in CTRs, CPCs, CPMs, and the share of spend between these regions to show differences between them. 4.1 First, we looked at CTR by region,6 %,5 %,4 %,3 % Europe JAPAC LATAM North America Rest of the World,2 %,1 % 213_Q2 213_Q3 213_Q4 214_Q1 Our data shows that all regions, particularly JAPAC, are increasing in terms of CTR, with the exception of North America which is on a steady decline. North America is Facebook s most mature market in terms of advertising and is seeing increased competition and higher spend levels.

10 1 In terms of share of spend, Europe has increased over the last three quarters, with JAPAC and North America decreasing. The graph shows aggregated spend versus the number of accounts advertising in each area, meaning that the spend per account is lower in North America. 1 % 9 % 8 % 7 % 6 % 5 % 4 % Europe JAPAC LATAM North America Rest of the World 3 % 2 % 1 % 213_Q2 213_Q3 213_Q4 214_Q1* *Please note that above graph depicts the average spend per account, not the total spend per region. Data is also representative of Facebook Ad accounts that are connected with Socialbakers Ad Analytics, and therefore, the amount of spend per region is not fully representative of the entire Facebook population. 4.3 Next, we look at the pricing of each placement by CPC and CPM,4,35,3,25 CPC Europe JAPAC LATAM North America Rest of the World,2,15,1,5 213_Q2 213_Q3 213_Q4 214_Q1*

11 11 1,4 1,2 1,8 CPM Europe JAPAC LATAM North America Rest of the World,6,4,2 213_Q2 213_Q3 213_Q4 214_Q1* This data shows that CPCs and CPMs are much higher in North America, with both metrics more than double the next nearest region. LATAM is the lowest-cost region in terms of CPC and CPM. 4.4 If you re in North America, consider running multi-variant A/B testing to increase the performance of your Facebook campaigns to ensure you stay ahead of your competition. 5. Industry Facebook advertising performance by vertical is a particularly interesting area, as it provides benchmarks for brands to their industry in general and shows how different industries perform in the social advertising environment. We ve studied a number of verticals with a particular focus on Telecom FMCG Food Electronics Finance Retail (food) Alcohol Ecommerce Airlines Auto Fashion

12 CTR by industry 1,2% CTR 1,%,8%,6%,4%,2% 213_Q2 213_Q3 213_Q4 214_Q1 Telecom FMCG Food Fashion Ecommerce Retail Food Finance Electronics Alcohol CTR is increasing in most of these verticals, presumably as they get smarter with their targeting and optimisation efforts. Ecommerce brands get the highest CTR (and it continues to increase), with retail food, electronics, and fashion brands all having similar CTRs. Auto and finance brands had the lowest CTR in this category. 5.2 Share of spend 1 % 9 % 8 % 7 % 6 % 5 % 4 % 3 % 2 % 1 % Telecom Retail Food FMCG Food Finance Fashion Electronics Ecommerce Alcohol 213_Q2 213_Q3 213_Q4 214_Q1

13 In terms of CPC and CPM, the following results have been found.,2 CPC,18,16,14,12,1,8,6,4,2 213_Q2 213_Q3 213_Q4 214_Q1 Telecom FMCG Food Fashion Ecommerce Retail Food Finance Electronics Alcohol 1 CPM,9,8,7,6,5,4,3,2,1 213_Q2 213_Q3 213_Q4 214_Q1 Telecom FMCG Food Fashion Ecommerce Retail Food Finance Electronics Alcohol CPCs generally declined over time, particularly in the Electronics and Auto verticals. CPMs on the other hand increased in Q1 214 compared to Q This again may be due to increased competition. Electronics saw the biggest CPM increase this quarter, with Finance and Auto seeing a small decline.

14 Takeaway Industry The key takeaway from this section is that some verticals are more competitive, and therefore more expensive to target than others. Some of the softer brands (Retail Food, for instance) achieve higher CTRs and lower CPCs, while Electronics brands are paying much more due to the higher-value items being offered, increased competition, and a more sales-led approach. 5.5 Suggestion If you re in one of the more competitive verticals, consider how you can target in a different way than the competition to gain a competitive advantage. Also, be more creative with your content and boost it in News Feeds to achieve a larger share of voice in a slightly softer way. 6. Key findings News Feed Ads dominate CTRs and share of spend Page post sponsored stories are a dominant ad type, largely due to their presence in News Feed North America dominates in terms of regions, although CTRs are higher in the other areas Verticals such as Electronics, Retail, and E-Commerce are particularly competitive

15 15 Facebook advertising is going from strength to strength, and we expect this trend to continue through 214. Facebook advertising is clearly something that is going to continue to grow in importance for marketers, and with increased competition it will be paramount for marketers to use all the necessary tools to help optimize performance. Socialbakers has developed an advanced social measurement, management, and optimization solution to increase the effectiveness of social advertising campaigns. For more, check out ads.socialbakers.com