Facebook ad interaction rates and return on ad spend have increased since Thanksgiving, according to Kenshoo Social.
The social marketing platform company says interaction rate is up 46 percent, meaning users are taking more actions after clicking on ads, including Liking pages, installing apps and completing sales. Kenshoo says direct sales revenue — defined as retail revenue from online sales transactions following a Facebook ad click — went up 129 percent on Cyber Monday. As a result, return on ad spend averaged $10.95 that day.
These stats show Facebook’s increasing value for advertisers during the holiday shopping season. Interaction and conversion rates tend to improve this time of year, which makes sense given that advertisers are running more promotions and consumers are more in the buying mindset. Kenshoo says the increase is consistent with last year, but compared to past years, retailers are now spending more and they’ve learned how to run more effective campaigns. The result is a greater improvement in return on ad spend.
“Retail advertisers are generally becoming more experienced and sophisticated with their direct response social media campaigns,” Kenshoo Social Senior Director of Product Marketing Todd Herrold says. “We are seeing advertisers taking the learnings they’ve obtained throughout the year in terms of what ad types, messages, and promotions resonate most with their target audiences and then leveraging these practices as they increase their overall social media budgets over the holidays and optimize their campaigns.”
Facebook earned $943 million in ad revenue during Q4 last year and has brought in $2.95 billion from ads between Q1 and Q3 2012. This holiday season is primed to be the company’s most lucrative quarter yet, as advertisers turn to Facebook’s Offers, mobile ads and other new products to drive holiday sales.