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According to data from Nanigans’ clients in Q4 2013, advertisers found their Facebook marketing delivered more revenue-per-click quarter over quarter (QOQ) and year-over-year (YOY) on desktop and mobile despite higher costs.
The increase in YOY CTRs shows that marketers are generating strong returns, indicating that marketers are seeing high engagement on Facebook. Marketers have shifted their focus to the News Feed and are constantly iterating their ad creative to feature compelling imagery and messaging to attract their ideal audiences. Higher CTRs may also reflect Facebook’s recent steps to streamline its ad formats and improve relevancy for consumers.
The 3.3X increase in CPMs YOY shows the spike in demand which is most likely due to heightened demand for inventory as brands and agencies rush to meet their seasonal objectives. An interesting trend we noted is a spike in costs the last month of every quarter (on average an increase of 30% from the first to last month of the quarter) as advertisers rush to meet their quarterly volume goals.
Marketers continue to focus on CPC as a Key Performance Indicator (KPI). The increase in demand QOQ is most likely due to seasonality, but the 7% YOY decline indicates that Facebook marketers have become more sophisticated with Facebook’s targeting options and are increasingly only paying what each ad is worth based on their business objectives.
Despite higher average CPCs and CPMs, the RPC for Facebook advertisers has remained positive – meaning that advertisers can expect to realize greater value in sales revenue than the cost of their Facebook advertising investment. Advertisers are increasingly shifting their budgets to Facebook as it is the place for proven reach and ROI.
In 2013, the surge in mobile adoption helped to grow Facebook’s mobile user base, creating new opportunities for marketers. With 945 million daily active mobile users, advertisers are embracing it as a critical engagement point with their base. Mobile ad spending is hitting new heights—45% of Nanigans Q4 ad spend was from mobile in 2013, up from 12% in Q4 2012. Facebook reported in Q4 2013 that 53% of its advertising revenue came from mobile.
Facebook mobile CPM rates increased 27% QOQ and 21% YOY, indicating a healthy demand for mobile ads. Desktop News Feed ad CPM rates increased 8% QOQ and 6X YOY as advertisers shifted spend to News Feed from RHS starting in Q2 of 2013.
Facebook mobile ad CPC rates surged 27% QOQ and 46% YOY. Desktop News Feed ad CPC rates increased 20% QOQ and 111% YOY.
The average Facebook Mobile ad RPC increased by 57% QOQ and 15X YOY. Facebook desktop News Feed ad RPC increased by 25% QOQ and 217% YOY. This shows that Facebook is the place for advertisers to drive return on investment on mobile and desktop.
When examining KPIs at the audience level, we found that on average females cost $.13 more than males, but delivered a $.50 higher RPC.
Advertisers recognized the value of the Facebook female audience and on average, allocated 65% of their budget to females and 35% to males.
When examining KPIs by age group, our revenue-per-click data suggests that the teen demographic, 18-24, is the worst monetizing demographic, and 45-54 is the best performing age group.
We found a similar trend when we mapped marketers’ Facebook ad budget allocation by Age Range. We extrapolated ad spend for traditional age ranges (18-24, 25-34, 35-44, 45-54 and 55-64) and found that 84% of ad spend is allocated to ages 25+.
To analyze quarterly data in its historical context, an aggregate data set was built from the advertisers and partners who have been active on the Nanigans Ad Engine platform during the previous 12 months. Nanigans clients include 200 of the world’s leading performance marketers in ecommerce, gaming and pure-play internet businesses.