social-advertising-quarterly-report 2014
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1<br />
Social Advertising<br />
Quarterly Report<br />
Socialbakers Quarterly Ads Benchmark Reveals<br />
News Feed Ads Dominate CTRs and Share of Spend<br />
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2<br />
1. Introduction<br />
Social <strong>advertising</strong> continues to grow at a rapid rate, with the majority of<br />
that growth coming from Facebook. Now, 92% of <strong>social</strong> marketers <strong>report</strong><br />
that they are using Facebook for <strong>advertising</strong>.<br />
Facebook is a powerful <strong>advertising</strong> platform, but there are some who still<br />
debate its value for brands. Although a lot of writing focuses on claims<br />
that Facebook’s organic reach is declining in favour of paid ads on the<br />
platform, most brands find that Facebook <strong>advertising</strong> is highly efficient<br />
and generates long term ROI.<br />
This <strong>report</strong> will take a look at Facebook <strong>advertising</strong> in detail to showcase<br />
what has changed from Q2 2013 through Q1 <strong>2014</strong>.<br />
In this <strong>report</strong> you will learn<br />
Which Facebook ad placements and types work the best<br />
Average KPIs by industry<br />
Average KPIs by region<br />
Forecast on Facebook Q1 <strong>quarterly</strong> earnings for <strong>advertising</strong>
3<br />
1.1<br />
Methodology<br />
We’ve pulled together data from the Socialbakers Ad Analytics tool, industry data, and Facebook<br />
<strong>quarterly</strong> <strong>report</strong>s to present our <strong>quarterly</strong> Facebook <strong>advertising</strong> <strong>report</strong>.<br />
Data has been analysed from April 2013 - March <strong>2014</strong> for verticals, and April 2013 - February <strong>2014</strong><br />
for all other sections. We have looked at more than 2,000 <strong>advertising</strong> accounts and aggregated their<br />
performance (impressions, spend, clicks) into ad types, placements, regions, and verticals.<br />
1.2<br />
KPI Definitions<br />
Click-Through Rate (CTR) Number of clicks divided by number of impressions per ad. Example: If the<br />
CTR of an ad is 1%, that means that 1% of everyone who saw the ad clicked.<br />
Cost per Click (CPC) Total cost divided by number of clicks per ad.<br />
Cost per Impression (CPM) Total cost divided by number of impressions per ad, multiplied by 1000.<br />
Example: A business may have bought 10,000 impressions at a CPM of $5, meaning they spent $50.<br />
2. Ad Placements<br />
Determining the right ad placements is crucial for increasing the effectiveness of your ads. Why?<br />
Certain types of ads perform better in general - such as ads in News Feed- while others work better<br />
based on the content that is distributed.<br />
Here is a quick list of the six different types of ad placements that advertisers can choose from when<br />
setting up an Ad Set:<br />
All Facebook - Will create variations<br />
for every type of ad placement<br />
News Feed (Desktop and Mobile)<br />
News Feed (Mobile)<br />
Desktop - Will create 2 variations<br />
(News Feed Desktop and Right-Hand Side)<br />
News Feed (Desktop)<br />
Right- Hand Side
4<br />
2.1<br />
Here, we look at CTR and the breakdown of ad placement effectiveness:<br />
0,03 %<br />
0,025 %<br />
0,02 %<br />
0,015 %<br />
0,01 %<br />
All Facebook<br />
Desktop<br />
News Feed (Desktop and Mobile)<br />
News Feed (Desktop)<br />
News Feed (Mobile)<br />
Right-hand Column<br />
0,005 %<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
As one would expect due to time spent in News Feed, CTRs on the News Feed are much higher<br />
than the right-hand column, and mobile ads dominate desktop ads in terms of clickthrough rate.<br />
News Feed ads are growing quarter-on-quarter, with mobile increasing it’s dominance from Q3 2013<br />
through to Q1 <strong>2014</strong>.<br />
2.2<br />
Below, you can see how advertisers adjusted their ad placement preferences by taking a look at the<br />
quarter-over-quarter spend. Note the decline in the “All Facebook” placement:<br />
All Facebook<br />
Desktop<br />
News Feed (Desktop and Mobile)<br />
News Feed (Desktop)<br />
News Feed (Mobile)<br />
Right-hand Column<br />
100 %<br />
90 %<br />
80 %<br />
70 %<br />
60 %<br />
50 %<br />
40 %<br />
30 %<br />
20 %<br />
10 %<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
This shift in ad placement spend shows the changing attitudes of advertisers. Interestingly, mobile<br />
News Feed lost share slightly to News Feed on desktop and mobile, although this may be due to<br />
advertisers’ increasing their post boosting efforts, with the default targeting option being to target<br />
both desktop and mobile.
5<br />
2.3<br />
Next, we look at CPC and CPM of each ad placement<br />
0,25 %<br />
0,2 %<br />
0,15 %<br />
0,1 %<br />
0,05 %<br />
CPC<br />
All Facebook<br />
Desktop<br />
News Feed (Desktop and Mobile)<br />
News Feed (Desktop)<br />
News Feed (Mobile)<br />
Right-hand Column<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
3,5 %<br />
3 %<br />
2,5 %<br />
2 %<br />
1,5 %<br />
CPM<br />
All Facebook<br />
Desktop<br />
News Feed (Desktop and Mobile)<br />
News Feed (Desktop)<br />
News Feed (Mobile)<br />
Right-hand Column<br />
1 %<br />
0,5 %<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
The graphs show that CPCs and CPMs are<br />
much lower on ads that are targeted to “All<br />
Facebook,” with the most expensive being<br />
News Feed placements. The reason these are<br />
often more expensive in terms of CPC and CPM<br />
is due to higher competition - more posts are<br />
promoted in fewer ad slots available compared<br />
to the right-hand column placements.<br />
News Feed mobile placements have seen an<br />
upward trend in terms of CPM since Q2 2013,<br />
however, they have declined slightly this quarter.<br />
The right-hand column ads have seen a<br />
marked decrease in terms of CPC over the past<br />
year as their competitiveness begins to decline.
6<br />
2.4<br />
Ad Placement Takeaway<br />
In terms of ad placement, the key takeaway for advertisers is that News Feed Ads are starting to dominate<br />
in terms of ad spend and CTRs, and as a result CPCs and CPMs are higher for these prized slots.<br />
2.5<br />
Suggestion<br />
We recommend that advertisers focus their attention on News Feed. This is a more competitive environment<br />
for a reason - the potential here is bigger. News Feed Ads attract higher levels of user interaction<br />
due to their prominence.<br />
3. Advertising Type<br />
We’ve also studied ad types, including<br />
App ads<br />
Event ads<br />
Mobile app install ads<br />
Page Like ads<br />
Page Like sponsored stories<br />
Page post sponsored stories<br />
Sponsored Stories
7<br />
3.1<br />
The first data point shows the CTR of each of these ad types<br />
0,025 %<br />
0,02 %<br />
0,015 %<br />
0,01 %<br />
0,005 %<br />
0<br />
2013_Q1 2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1*<br />
App Ad<br />
Mobile App Install Ad<br />
Page like Ad<br />
Page Post Sponsored Story<br />
Event Ad<br />
Open Graph Sponsored Story<br />
Page Like Sponsored Story<br />
The CTR on mobile app install ads has dropped greatly over the last year, but they are still higher than<br />
most. At present, Page post sponsored stories are seeing the highest CTRs. App and event ads have<br />
a very small CTR compared to the other formats.<br />
3.2<br />
Share of spend has increased on Page post sponsored stories with the increase of these types of ads<br />
as more mobile inventory has opened up over time.<br />
100 %<br />
90 %<br />
80 %<br />
70 %<br />
60 %<br />
50 %<br />
40 %<br />
30 %<br />
20 %<br />
App Ad<br />
Event Ad<br />
Mobile App Install Ad<br />
Open Graph Sponsored Story<br />
Page Like Ad<br />
Page Like Sponsored Story<br />
Page Post Sponsored Story<br />
10 %<br />
0<br />
2013_Q1 2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1
8<br />
3.3<br />
In terms of CPC and CPM for various ad types, Page post sponsored stories (which are predominantly<br />
News Feed Ads) have the lowest CPC of any of the ad types, but higher CPMs than all but the<br />
mobile app install ads.<br />
0,3 %<br />
CPC<br />
0,25 %<br />
0,2 %<br />
0,15 %<br />
0,1 %<br />
0,05 %<br />
0<br />
2013_Q1 2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
3,5 %<br />
CPM<br />
3 %<br />
2,5 %<br />
2 %<br />
1,5 %<br />
1 %<br />
0,5 %<br />
0<br />
2013_Q1 2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
App Ad<br />
Mobile App Install Ad<br />
Page like Ad<br />
Page Post Sponsored Story<br />
Event Ad<br />
Open Graph Sponsored Story<br />
Page Like Sponsored Story<br />
Mobile app install ads had the highest CPM and CPC across the board, although this decreased<br />
in the latest results. CPC and CPMs stayed at relatively similar levels between Q1 2013 and Q1 <strong>2014</strong>.
9<br />
3.4<br />
Takeaway Ad Types<br />
Sponsored stories are being removed from the<br />
<strong>advertising</strong> system as Facebook is streamlining its<br />
<strong>advertising</strong> offerings (Page post and Page Like ads<br />
already automatically have the best <strong>social</strong> context<br />
added), and we feel this is a positive thing. Page<br />
post sponsored stories at present have the highest<br />
CTR, the highest share of spend, and the lowest<br />
CPM and CPCs. Despite the removal of the format<br />
of sponsored stories, ads with <strong>social</strong> context will<br />
still exist across all ad variants as noted above.<br />
3.5<br />
Suggestion<br />
As with the placement section, this leads to the recommendation that advertisers should focus their<br />
attentions on News Feed as these placements are more cost effective and achieve higher response rates.<br />
4. Region<br />
We’ve looked at the world of Facebook <strong>advertising</strong> on a regional basis, covering 5 defined regions<br />
Europe<br />
JAPAC<br />
LATAM<br />
North America<br />
Rest of the World<br />
We’ve studied the differences in CTRs, CPCs, CPMs, and the share of spend between these regions<br />
to show differences between them.<br />
4.1<br />
First, we looked at CTR by region<br />
0,006 %<br />
0,005 %<br />
0,004 %<br />
0,003 %<br />
Europe<br />
JAPAC<br />
LATAM<br />
North America<br />
Rest of the World<br />
0,002 %<br />
0,001 %<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
Our data shows that all regions, particularly JAPAC, are increasing in terms of CTR, with the exception<br />
of North America which is on a steady decline. North America is Facebook’s most mature market<br />
in terms of <strong>advertising</strong> and is seeing increased competition and higher spend levels.
10<br />
In terms of share of spend, Europe has increased over the last three quarters, with JAPAC and North<br />
America decreasing. The graph shows aggregated spend versus the number of accounts <strong>advertising</strong><br />
in each area, meaning that the spend per account is lower in North America.<br />
100 %<br />
90 %<br />
80 %<br />
70 %<br />
60 %<br />
50 %<br />
40 %<br />
Europe<br />
JAPAC<br />
LATAM<br />
North America<br />
Rest of the World<br />
30 %<br />
20 %<br />
10 %<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1*<br />
*Please note that above graph depicts the average spend per account, not the total spend per region.<br />
Data is also representative of Facebook Ad accounts that are connected with Socialbakers Ad Analytics,<br />
and therefore, the amount of spend per region is not fully representative of the entire Facebook population.<br />
4.3<br />
Next, we look at the pricing of each placement by CPC and CPM<br />
0,4<br />
0,35<br />
0,3<br />
0,25<br />
CPC<br />
Europe<br />
JAPAC<br />
LATAM<br />
North America<br />
Rest of the World<br />
0,2<br />
0,15<br />
0,1<br />
0,05<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1*
11<br />
1,4<br />
1,2<br />
1<br />
0,8<br />
CPM<br />
Europe<br />
JAPAC<br />
LATAM<br />
North America<br />
Rest of the World<br />
0,6<br />
0,4<br />
0,2<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1*<br />
This data shows that CPCs and CPMs are much higher in North America, with both metrics more than<br />
double the next nearest region. LATAM is the lowest-cost region in terms of CPC and CPM.<br />
4.4<br />
If you’re in North America, consider running multi-variant A/B testing to increase the performance of<br />
your Facebook campaigns to ensure you stay ahead of your competition.<br />
5. Industry<br />
Facebook <strong>advertising</strong> performance by vertical is a particularly interesting area, as it provides benchmarks<br />
for brands to their industry in general and shows how different industries perform in the <strong>social</strong><br />
<strong>advertising</strong> environment.<br />
We’ve studied a number of verticals with a particular focus on<br />
Telecom<br />
FMCG Food<br />
Electronics<br />
Finance<br />
Retail (food)<br />
Alcohol<br />
Ecommerce<br />
Airlines<br />
Auto<br />
Fashion
12<br />
5.1<br />
CTR by industry<br />
1,2000%<br />
CTR<br />
1,0000%<br />
0,8000%<br />
0,6000%<br />
0,4000%<br />
0,2000%<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
Telecom<br />
FMCG Food<br />
Fashion<br />
Ecommerce<br />
Retail Food<br />
Finance<br />
Electronics<br />
Alcohol<br />
CTR is increasing in most of these verticals, presumably as they get smarter with their targeting and<br />
optimisation efforts. Ecommerce brands get the highest CTR (and it continues to increase), with retail<br />
food, electronics, and fashion brands all having similar CTRs. Auto and finance brands had the lowest<br />
CTR in this category.<br />
5.2<br />
Share of spend<br />
100 %<br />
90 %<br />
80 %<br />
70 %<br />
60 %<br />
50 %<br />
40 %<br />
30 %<br />
20 %<br />
10 %<br />
Telecom<br />
Retail Food<br />
FMCG Food<br />
Finance<br />
Fashion<br />
Electronics<br />
Ecommerce<br />
Alcohol<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1
13<br />
5.3<br />
In terms of CPC and CPM, the following results have been found.<br />
0,2<br />
CPC<br />
0,18<br />
0,16<br />
0,14<br />
0,12<br />
0,1<br />
0,08<br />
0,06<br />
0,04<br />
0,02<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
Telecom<br />
FMCG Food<br />
Fashion<br />
Ecommerce<br />
Retail Food<br />
Finance<br />
Electronics<br />
Alcohol<br />
1<br />
CPM<br />
0,9<br />
0,8<br />
0,7<br />
0,6<br />
0,5<br />
0,4<br />
0,3<br />
0,2<br />
0,1<br />
0<br />
2013_Q2 2013_Q3 2013_Q4 <strong>2014</strong>_Q1<br />
Telecom<br />
FMCG Food<br />
Fashion<br />
Ecommerce<br />
Retail Food<br />
Finance<br />
Electronics<br />
Alcohol<br />
CPCs generally declined over time, particularly in the Electronics and Auto verticals. CPMs on the other<br />
hand increased in Q1 <strong>2014</strong> compared to Q4 2013. This again may be due to increased competition.<br />
Electronics saw the biggest CPM increase this quarter, with Finance and Auto seeing a small decline.
14<br />
5.4<br />
Takeaway Industry<br />
The key takeaway from this section is that some verticals are more competitive, and therefore more<br />
expensive to target than others. Some of the softer brands (Retail Food, for instance) achieve higher CTRs<br />
and lower CPCs, while Electronics brands are paying much more due to the higher-value items being<br />
offered, increased competition, and a more sales-led approach.<br />
5.5<br />
Suggestion<br />
If you’re in one of the more competitive verticals, consider how you can target in a different way than the<br />
competition to gain a competitive advantage. Also, be more creative with your content and boost it in News<br />
Feeds to achieve a larger share of voice in a slightly softer way.<br />
6. Key findings<br />
News Feed Ads dominate CTRs and share of spend<br />
Page post sponsored stories are a dominant ad type, largely due to their presence in News Feed<br />
North America dominates in terms of regions, although CTRs are higher in the other areas<br />
Verticals such as Electronics, Retail, and E-Commerce are particularly competitive
15<br />
Facebook <strong>advertising</strong> is going from strength to strength, and we expect this trend<br />
to continue through <strong>2014</strong>. Facebook <strong>advertising</strong> is clearly something that is going to<br />
continue to grow in importance for marketers, and with increased competition it will<br />
be paramount for marketers to use all the necessary tools to help optimize performance.<br />
Socialbakers has developed an advanced <strong>social</strong> measurement, management, and<br />
optimization solution to increase the effectiveness of <strong>social</strong> <strong>advertising</strong> campaigns.<br />
For more, check out<br />
ads.<strong>social</strong>bakers.com