Facebook Q4 Ad Spend More Than Doubled Year-Over-Year (Report)

Total Facebook ad spending by 4C clients in the fourth quarter of 2015 more than doubled year-over-year, driven by direct-response advertisers.

Total Facebook ad spending by 4C clients in the fourth quarter of 2015 more than doubled year-over-year, driven by direct-response advertisers.

4C, a Facebook Marketing Partner, found that despite the surge in ad spending on the social network, click-through rates and cost per click were relatively flat, adding that this meant Facebook was able to remain efficient despite the heavier ad volume.

Other 4C Facebook findings for the fourth quarter of 2015 included:

  • Total ad spend was up 128 percent in the fourth quarter of 2015 compared with the year-ago period, and up 46.9 percent versus the third quarter of 2015.
  • CPC rose 21.5 percent quarter-over-quarter, but just 6.6 percent year-over-year.
  • Clicks also more than doubled year-over-year, up 113.9 percent in the fourth quarter of 2015.
  • Cost per thousand impressions (CPMs) were up 10.4 percent quarter-over-quarter and 26.8 percent year-over-year.
  • Marketers’ tactics worked, however, as impressions were also up 33.1 percent compared with the third quarter of 2015 and 79.8 percent versus the fourth quarter of 2014.
  • CTRs were down 9.2 percent versus the third quarter of 2015 and up 18.9 percent compared with the prior-year quarter.

4CQ42015Facebook

As for Instagram, 4C found that ad spend soared 3,100 percent on its platform between July and December. Ads were made available globally on the Facebook-owned photo- and video-sharing network in August.

That figure is not as startling as it sounds, however, as 4C had only five active Instagram advertiser accounts in July and 11 in August, while that figure leapt to 77 in December.

4CQ42015Instagram

4C said in a blog post revealing its findings:

If marketers can feel comfortable that costs won’t unexpectedly go through the roof on a channel, they will be able to safely plan costs and expected return. This stability could mean that more marketers will begin to rely on Facebook as a stable partner moving forward and dedicate more dollars to this publisher. When it comes to annual media planning, reliable channels tend to be more favored than volatile ones.

The fact that marketers were able to generate a higher response rate from their paid programs shows that they are getting savvier on what works on Facebook. That’s a strong sign that social advertisers are maturing in this channel and can continue to optimize their accounts to squeeze out more performance from their investment.

Finally, 4C offered the following four tips for advertisers to continue momentum following the holiday shopping season:

  1. Use Facebook conversion pixels to measure as much as you can: Facebook pixels can be utilized to track multiple events. Even if your end goal isn’t related to a specific action or revenue goal, measuring events once consumers click to your site is a great way to gain valuable insights into what is and isn’t working with your social advertising. These insights can help understand how to optimize your bids, creative and targeting to get the most return from your Facebook budget.
  2. Test and try new ad formats like carousels: As Facebook expands its ad offering, it continues to release new ad formats that require testing to develop best practice for their use. For example, carousel ads are highly impactful and can be much more interactive than standard ads. Their multi-panel format offers engaging storytelling opportunities for brands. Also, marketers can track performance on individual cards, which can be a quick way to test new, individual creative ideas.
  3. Run mixed placements on Instagram: Even though ads on Instagram are less than one year old, its market advantage is that it can be approached as simply another placement within Facebook’s suite. This makes it very accessible to marketers in a way that a new [non-Facebook] social ad offering will never be able to match. For social advertisers, the question is, “Why shouldn’t I?” run Instagram placements inside Facebook campaigns, and not, “Why should I?” If you have yet to run Instagram ads, try adding its placements to your existing Facebook accounts. Play around with them. Test them. See how they can be best applied to your social advertising strategy.
  4. Sync your social ads to TV: With more and more multitasking occurring during media consumption, getting in front of TV viewers on second screens is a new, exciting way to reach consumers. Take advantage of 4C TV Synced Ads to automatically run Facebook and Instagram ads when your television commercials air. You can even sync your social ads when competitor ads run or when certain programs air. This coordinated marketing approach can lead to increased engagement and other key performance metrics.

Readers: What did you think of 4C’s fourth-quarter-2015 findings?

Top image courtesy of fyv6561 / Shutterstock.com.