Facebook Ad Performance Continues to Improve in Q3; Retailers See Higher ROI on iOS

Kenshoo-Facebook-Ad-Performance-Trends-in-Q3-Oct2013Facebook ad performance showed solid quarter-over-quarter growth again in Q3, says Kenshoo Social in its latest analysis, this time covering more than 85 billion ad impressions across a representative sample of its advertiser and agency customers. Conversion rates were 2.36 times higher this past quarter than in Q2, with revenues more than doubling and ROI tripling. Kenshoo attributes the performance to several factors, including a refined and more engaging product inventory that has skewed more towards high-performing news feed units, and better audience targeting capabilities.

Impressions (+13%), clicks (+14.4%) and cost-per-click (CPC; -9%) all moved in favorable directions for advertisers, with revenues-per-click (RPC) also on the rise, almost twice as high as they were in Q2.

Separately, a study released by Nanigans examining retail advertisers on Facebook found that retailers are enjoying 3.75 times higher click-through rates than a year ago, and are averaging a 152% ROI.

Here are some other key data points from Nanigans’ report:

  • Click-through-rates for retailers advertising on Facebook have grown from 0.05% in Q3 2012 to 0.2% in Q3 2013;
  • CPCs dropped from $0.62 in Q3 2012 to $0.32 in Q1 2013, and have remained steady at $0.45 for the past 2 quarters;
  • ROI has been more variable, at 96% in Q4 2012, but soaring to 203% in Q1 2013. In Q2 2013, ROI stood at 152%, with Q3′s figure of 109% said underrepresented due to October revenue not being fully realized and attributed to September ad spend;
  • Facebook mobile CPCs increased 70% from Q1 to Q3, averaging out at $0.40 for iOS and $0.18 for Android;
  • RPC on iOS was a marked 6.1 times higher than Android during the first three quarters of the year ($0.94 vs. $0.15), with ROI an impressive 17.9 times higher (162% vs. -10%), although the same caveat applies to Q3 ROI figures;
  • CTRs are not proving to correlate well with ROI: Android averaged the higher CTR than iOS, but had far less return;
  • News feed now accounts for about 80% of retailers’ ad spend, up from roughly 35% in Q1;
  • CTRs for retailer ads in the news feed were about 26.4 times higher than right-hand side ads during the first three quarters of the year.

About the Data: The Nanigans report is based on nearly 200 billion impressions and 100+ retailers. More details on methodology can be found by following the link above.