A quarterly review of Facebook’s ad performance found increases in advertising metrics across the board, including click-through rates, total clicks and revenues driven by the ads themselves.
Kenshoo Social, a digital marketing company that works with “hundreds” of customers that advertise on Facebook, explored more than 75 billion Facebook ads over the past two quarters, finding evidence that the ads are not only working, but are in some cases undervalued. Kenshoo is considered a preferred marketing developer (PMD), meaning the company has been uniquely identified by Facebook as a marketer “driving outstanding positive impact.” In other words, Kenshoo and Facebook work closely together to ensure ad success for both companies.
Facebook advertisers who work with Kenshoo, including brands like Sears, Ticketmaster and CareerBuilder, reportedly saw an 18.5% increase in click through rates in Q2 over Q1, and revenues driven by Facebook ads were up nearly 30%. Click rates increased 16% and user interactions with the ads — likes, shares or comments — also increased by 57%. The research is not indicative of all Facebook advertisers — only those Kenshoo works with — but with 75 billion ads in the sample, it does offer a snapshot of Facebook ad performance.
Even with ad metrics up, advertisers using “last click conversion” attributions — that is, giving the ad credit only if a sale is directly from a user click on Facebook — actually undervalue Facebook ads by 30%, according to Aaron Goldman, the CMO of Kenshoo. This does not give the ad credit in scenarios in which users view an ad and then make a purchase at a later date, still driven by the ad but not immediately from Facebook.
Kenshoo isn’t the only marketing company to claim social media ads are undervalued. Monetate, which offers cloud-based marketing technology to customers, described a similar trend in its Q1 ecommerce quarterly report earlier this year. The report pointed to the “stickiness” of social media as a reason click through rates aren’t higher; users don’t want to leave the page so they store the ad information in their head for later use.
Facebook’s apparent increase in ad success can be attributed to two factors, Goldman said. First, advertisers are getting better at narrowing down their target audiences and honing in more appropriately on users who may find the ad engaging. Plus, Facebook’s algorithm is improving, meaning the site can better pinpoint relevant users within an advertiser’s target audience.
Ampush, another Strategic PMD who works with dozens of companies advertising on Facebook, is also seeing increases in user ad engagement. For Ampush, mobile use and the increase of page post ads and mobile app install ads has been another major driving factor. “The overall growth in mobile has definitely correlated and contributed to the overall trend towards improved ad metrics overall for Facebook,” says Chris Amos, Ampush co-founder and CMO.
A separate recent study by Salesforce Marketing Cloud explored Facebook’s ad performance over the first three months of the year, noting a major difference in ad performance based on region. Both Europe and Asia-Pacific saw substantially higher click through rates on ads than the Americas, with Asia-Pacific more than 60% above the global average. Salesforce, a third Strategic PMD, has not yet released its finding from Facebook’s Q2, and a spokesperson declined to comment on whether or not Salesforce saw increases similar to Kenshoo and Ampush.
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