Spruce Media Bullish On Facebook Advertising In Its 2Q Report

By David Cohen 

Spruce Media, a Facebook Strategic Preferred Marketing Developer, offered its take on the state of Facebook advertising in the second quarter of 2013 prior to the social network’s earnings call later Wednesday afternoon.

The major development in Facebook advertising in the second quarter, according to Spruce Media, was the social network’s announcement of efforts to simplify its offerings. And the most important future development will be its eventual launch of video ads.

The company compared its clients’ results in the second quarter of 2013 with the first quarter, and it found that:

  • CPMs (cost per thousand impressions) were up 10 percent on average across all ad placements.
  • Cost-per-click was up in all ad placements, including by 75 percent in the News Feed.
  • Click-through rates were down by an average of 30 percent in three out of four ad placements.
  • Engagement rates (likes, comments, shares) on ads were down by an average of 47 percent.
  • Overall CPCs were $0.59 in the second quarter versus $0.46 in the first quarter.
  • Costs per like were $0.58 compared with $0.43.
  • The cost for mobile application install ads rose to $1.67 from $1.57.
  • Cost per engagement rose from $0.31 to $0.36.
  • 38 percent of Spruce Media advertisers’ spending was allocated to mobile, up from 30 percent in the first quarter.

Spruce Media concluded in its second-quarter report:

While there are many fluctuations in ad prices and yield quarter-to-quarter, for now, advertiser demand is still strong, and we don’t see Facebook being too concerned over fluctuations in its CPC, CPM, or CTR rates.

Facebook seems to be mostly focused on one thing: how to adapt to a future of users accessing Facebook through their mobile devices. As of March 31, there were 751 million monthly active users on Facebook’s mobile application, up from only 345 million one year before. This means 68 percent of Facebook’s MAU base is accessing Facebook through mobile.

With mobile monetization continuing to grow, strong advertiser demand, and opportunities ahead to monetize video advertising and Instagram inventory, Facebook is very well-positioned for the future in its advertising programs.

Readers: What will Facebook have to say about advertising during its second-quarter earnings call?