How can Facebook advertisers succeed in Q4 — the holiday season?

The most important time of the year is coming up for advertisers — the fourth quarter. It’s the holiday season, when many advertisers make their big push to consumers. For Facebook, Q4 can be particularly lucrative if current performance indicators keep trending the way they have been.

Facebook Strategic Preferred Marketing Developer Nanigans recently released an extensive report about ad performance so far this year on the social network, showing that engagement is up, and click-through rates rose 3.75X from Q3 2012 to this year’s Q3. Overall, return on investment is up 152 percent in 2013.

Nanigans Senior Vice President of Marketing Dan Slagen talked with Inside Facebook about the Facebook advertising forecast heading into Q4 — one that should see plenty of competition.

Nanigans studied the Q1-Q3 ad campaigns among more than 100 retailers in its client base, finding that click-through rates are at an all-time high. While people may complain about Facebook ads, the numbers show that more users are clicking on them. The click-through rate took a dip in the spring, but has risen steadily since May.

So we know that users are clicking on Facebook ads — but are they spending? Nanigans’ study shows that revenue per click (RPC) has been a rocky road in 2013, but it was sky high in November and December 2012.

All of this shows that, as more retailers put money behind their Facebook marketing, this year’s holiday season could become quite crowded. Facebook has made advertising simpler and given major retailers better tools to both create and monitor marketing.

Slagen noted that there will be a greater focus on mobile in this upcoming quarter, as companies look for some way to get people in the door of their brick-and-mortar stores. He also pointed to Facebook’s upgraded customer relationship management tools, allowing them to easily upload email lists and target users demographically and by interest. A greater amount of brands will likely spend more money during the holiday season to compete for a shrinking space in users’ News Feeds.

What does Slagen suggest retailers do? Come out swinging:

We are encouraging advertisers to go big early on in the quarter, or early on in the month. If you do go live early, then it gives you more room to optimize, and also enough room to scale or adjust your strategy. We expect advertisers to hit pretty hard right after Thanksgiving. One of the big things that we and our advertisers have spoken about is endless creative. With the amount of people that we’re going to be targeting, and the amount of campaigns that should be live, we cannot encourage enough creative to keep things fresh.

It’s also not enough to just have a mobile strategy on Facebook. Androids and iPhones/iPads are very different, and Nanigans found that while Android devices may yield a higher CTR, the ROI is better on iOS. Android averaged the highest CTR (2.73 percent), but didn’t score well in ROI. Meanwhile, ads engaged by iOS users contributed a 162 percent ROI so far this year.

Nanigans recommends that retailers should use revenue tracking technology to understand the quality of the customers acquired through Facebook, as it can be a powerful tool when used knowledgeably.

More retailers are also investing in space on the News Feed, eschewing the right-hand sidebar. Nanigans notes that among the brands in its study, engagement rates for retailers’ ads in News Feed (desktop and mobile) generated an average of 26.4X higher CTR than sidebar so far this year.

The study showed that as time went on this year, retailers fell in love with the unpublished photo post ad unit, which allows them to set and target a picture without posting it first. The domain ad to external URL fell out of favor, going from more than half of market share in January (in terms of Facebook ad choices) to less than 25 percent.

Oddly enough, while the ads leading users to the company website may have been poor in terms of CTR in Q3 (0.04 percent), they worked very well in terms of ROI (211 percent). The unpublished page post photo ads, meanwhile, generated a CTR of 1.40 percent, but an ROI of 79 percent. Brands should figure out what works best for their specific audience and adjust their Q4 gameplan accordingly.

Slagen told Inside Facebook that the brands that load up early and master targeting will be the ones that find success this holiday season. He noted that brands should ensure that they have a frictionless mobile experience, allowing users to easily make purchases without too many steps in between. Retailers can use targeted Facebook advertising to prompt users to go to their local branch:

If I’m here in Boston, and there’s a localized ad that I see for New York, that’s not going to work. You have to make sure that the targeting is really locked up. The good news is that Facebook makes that pretty easy, so overall, we shouldn’t expect to see too much of an issue there, but localization is No. 1. I think relevance, in terms of actually showing a unique ad to someone and giving them a reason to go to the store, (will be key). Is there a sale that’s only going to be for today? Is there an offer that expires at 5 o’clock today? What’s going to be that offering that really drives a sense of urgency and makes someone say, ‘I need to take advantage of this offer now’?

Readers: How are you gearing up your Facebook ad campaigns for Q4?

Top image courtesy of Shutterstock. Others courtesy of Nanigans.