Which Facebook Inc. Ad Tactics Cost the Most?

June 18, 2018

Facebook Inc. advertising CPMs declined, as expected, from Q4 2017 to Q1 2018, reports iProspect [download page] in a review of advertising performance from its clients. But while CPMs declined on a quarter-over-quarter basis by 30% due to lower post-holiday spending, they still increased by 40% from the year-earlier period. Some tactics carry a higher CPM than others, per the report.

Facebook Inc. in this case refers to advertising on Facebook, Instagram and the Facebook Audience Network (FAN). All figures below that refer to “Facebook Inc.” are inclusive of these platforms.

Campaigns with objectives other than reach comprised a majority of total spending on Facebook Inc. by iProspect’s clients during Q1, suggesting a continued move to direct response goals.

Such campaigns typically carry a higher cost than ones with a reach objective as they aim at lower-funnel objectives.

As such, lead generation campaigns averaged the highest CPMs for the quarter ($26.25), followed by event responses ($17.65). The analysts note that event response campaigns have a high CPM due in part to their being highly geo-targeted, which drives up costs.

By contrast, reach and awareness campaigns have much lower CPMs than direct response ones. Reach campaigns averaged a CPM of $3.76 for the quarter for iProspect’s clients, while brand awareness campaigns had an average CPM even lower ($3.40).

The study highlights an interesting shift for Facebook ads that have store visits as their objective. Bucking the trend of higher CPMs year-over-year, these campaigns actually experienced a 42% decrease in cost. These campaigns should grow in popularity with the introduction by Facebook of store sales optimization, iProspect argues, a tool that lets retailers advertise to people who are more apt to make purchases in-store.

Meanwhile, in other highlights from the analysis:

  • Video accounted for a majority (53%) of spending by iProspect’s clients across Facebook’s advertising platforms;
  • While ad budgets typically decrease between Q4 and Q1, video investment was up by 13% quarter-over-quarter;
  • View rate grew slightly on a quarter-over-quarter basis but decreased year-over-year, a shift attributed in part to growth in cost per views and to shoppable ad units that drive click-throughs rather than full video views.

The full report, which contains more data including cost-per-click and cost-per-conversion trends, is available for download here.

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