GLOBAL FACEBOOK ADVERTISING BENCHMARK REPORT Q1 …...GLOBAL FACEBOOK ADVERTISING BENCHMARK REPORT...

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GLOBAL FACEBOOK ADVERTISING BENCHMARK REPORT Q1 2019

Transcript of GLOBAL FACEBOOK ADVERTISING BENCHMARK REPORT Q1 …...GLOBAL FACEBOOK ADVERTISING BENCHMARK REPORT...

Page 1: GLOBAL FACEBOOK ADVERTISING BENCHMARK REPORT Q1 …...GLOBAL FACEBOOK ADVERTISING BENCHMARK REPORT Q1 2019. ... This report highlights key trends seen by companies leveraging Nanigans

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GLOBALFACEBOOK ADVERTISING

BENCHMARK REPORT

Q1 2019

Page 2: GLOBAL FACEBOOK ADVERTISING BENCHMARK REPORT Q1 …...GLOBAL FACEBOOK ADVERTISING BENCHMARK REPORT Q1 2019. ... This report highlights key trends seen by companies leveraging Nanigans

ADVERTISERS CONTINUE SCALING BUDGETS FOR STORIES ADS

In the first quarter of 2019, performance advertisers leveraging Stories increased budgets dedicated to the format by 14% year-over-year and 9% quarter-over-quarter.

CTR, CPM and CPC rates for Stories also saw large increases on a year-over-year basis. Click-through rates for Stories ads jumped by 14% compared to Q1 2018. CPMs also saw sizeable YoY increases of 89%. Costs on a per-click basis grew by a robust 66% compared to a year ago.

Despite the momentum around Stories advertising, newsfeed (non-Stories) ads remain the format where Nanigans customers dedicate the large majority of their ad spend. The share of ad spend going to Stories ads is still under five percent. But each quarter, the Stories format gets another small chunk of spend, proving it can perform at the same level as the Facebook and Instagram feeds.

This report highlights key trends seen by companies leveraging Nanigans advertising automation software to grow the revenue impact of their direct response ad campaigns on Facebook.

KEYTRENDS

+14%YEAR/YEARaverage stories

ad spending

+9%QUARTER/QUARTER

average storiesad spending

+14%YEAR/YEAR

click-through rate

+89%YEAR/YEARcost per 1,000

impressions

+66%YEAR/YEAR

cost per click

AD SPEND FOR STORIES GROWS AGAIN, ECOMMERCE BRANDS UP INVESTMENT IN DYNAMIC ADS

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Starting last quarter, we began categorizing our advertisers into three types: App installers, lead generation, and transaction-driven.

Companies focused on app installs typically hail from gaming, entertainment and on-demand services. Their primary goal is to increase app downloads and monetize their apps. Lead-driven companies tend to be in the banking, insurance, auto, and telcom spaces that sell a small number of high-value subscriptions and products. Companies focused on transactions are mostly retailers and travel companies with a large catalogue of products or offerings. Their goal is to use advertising to generate online and offline sales.

BUDGETS FOR DYNAMIC ADS SKYROCKET FOR TRANSACTION-BASED COMPANIES

Online retailers continue to funnel budgets into Facebook dynamic ads. Year-over-year growth was substantial—an increase of 77%—underscoring the effectiveness that dynamic ads on Facebook and Instagram have at driving purchases for ecommerce companies. Dynamic ads also delivered far better click-through rates in Q1 (3.47%) for transaction-focused companies than non-dynamic ads (2.08%).

This increased investment is a sign of Facebook’s value in the ecommerce sector as retailers use the channel to reach more shoppers and generate sales.

A NOTE ON OUR NEW CATEGORIES BASED ON ADVERTISING OBJECTIVE

YEAR-OVER-YEAR AD SPEND GROWTH FOR DYNAMIC ADS

77% GROWTH

Q1 2018 Q1 2019

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CTRCLICK-THROUGH RATE

Global click-through rates on Facebook in Q1 hit their highest peak for the year. The CTR average of 1.54% represents a 1% increase quarter-over-quarter. Though that’s a small boost, it is still impressive given that the Q4 holiday season is typically when clicks surge among Facebook users. CTRs for Q1 represent a 15% increase year-over-year.

This steady rise in global CTRs can be attributed to the effectiveness dynamic ads have in delivering clicks at scale across Facebook’s user base. In Q1, CTRs for dynamic ads were 3.43%, far exceeding CTRs for non-dynamic ads at 1.16%.

CTRs for those advertisers choosing app installs as their objective decreased by 9% quarter-over-quarter, averaging 0.53%.

Year-over-year, CTRs for app installers were down a touch at -2%.

CTRs were down 19% for lead-gen companies quarter-over-quarter, likely due to higher volume commonly seen during the Q4 holiday season. Lead-gen CTRs were down 39% year-over-year, but that’s compared to Q1 2018, a quarter with the highest CTRs of the year.

In Q1, CTRs for transaction-focused companies jumped by 8% year-over-year and by 11% quarter-over-quarter. Companies with a transaction focus generated significantly more clicks than app installers, lead gen companies, and the global average. In Q1, the CTR for transaction companies was 2.7% compared to the global average of 1.5%.

+1%QUARTER/QUARTER

+15%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

1.33%

1.53%CTR - GLOBAL

-9%QUARTER/QUARTER

-2%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

.54% .53%

CTR - APP INSTALL

-19%QUARTER/QUARTER

-39%YEAR/YEAR

+11%QUARTER/QUARTER

+8%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

2.46%2.65%

CTR - TRANSACTION1.43%

.87%

CTR - LEAD GENERATION

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

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CPMCOST PER 1,000 IMPRESSIONS

Across Nanigans customers, CPMs were down year-over-year (-10%) and quarter-over-quarter (-18%) to an average of $7.44.

This CPM dip in Q1 should be seen in the context of the high CPM competition during Q4 holidays. Also, throughout 2018 CPMs rose each quarter. Historically, Q1 has the lowest CPMs of the year, so expect them to rise again throughout 2019.

CPMs specifically for app-install advertisers also decreased quarterly. CPMs fell by 19% compared to the high CPM holiday season in Q4 2018, to an average of $7.39 in Q1. However, on a year-over-year basis CPMs were up by 24%. Likely the main factor for this growth is that app install-minded advertisers are mostly game marketers that increased their share of spend on video,

which commands higher CPMs than other ad formats.

For lead-gen focused companies, CPMs dropped by 18% quarter-over-quarter and 24% year-over-year. One culprit may be that the share of ad spend going to video was down year-over-year, which may help explain decreasing CPMs.

Among transaction-focused advertisers, CPMs showed a quarterly decrease of 23% and a year-over-year decrease of 28%. Holiday season competition in ecommerce results in high CPMs for ecommerce, making Q4 a hard act to follow. On top of that, Q1 traditionally has the lowest CPMs of the year for ecommerce advertisers, so it’s likely they’ll rise with each quarter throughout 2019.

-18%QUARTER/QUARTER

-10%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

$8.30

9.64%

CPM - GLOBAL

-19%QUARTER/QUARTER

+24%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

$5.95

$7.39

CPM - APP INSTALL

-18%QUARTER/QUARTER

-24%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

$14.37

$10.86

CPM - LEAD GENERATION

-23%QUARTER/QUARTER

-28%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

$6.51

$4.70

CPM - TRANSACTION

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CPCCOST PER CLICK

Costs on a per-click basis dropped by 19% quarter-over-quarter in Q1 2019 to a global average of $0.48. CPC rates fell by 22% compared to averages seen a year ago in Q1 2018. Across app install-minded marketers, CPCs in Q1 averaged $1.39. This average was up by 26% year-over-year. On a quarter-over-quarter basis, that number was down 12%—but that’s compared to holiday-season Q4 when CPC rates were a year-high $1.58. Facebook’s value optimization and minimum ROAS bidding features may be why CPCs for app marketers are consistently higher than for transaction-focused advertisers. These features help target users more likely to make in-app purchases. While these types of optimization are effective at driving revenue, they can also raise costs per-click.

For Q1 2019, CPCs for lead gen-focused companies increased 2% quarter-over-quarter and 25% year-over-year. This is not surprising given lead gen-focused companies typically hold ad spend for Q1 knowing the services they provide (gym memberships, insurance plans, mortgages) appeal to people more after the holiday rush.

Advertisers with transactions as their objective on Facebook experienced CPCs averaging 31% lower than those seen in Q4 2018. The lower CPCs in Q1 can partly be due to the higher costs associated with the Q4 holiday shopping season.

But the quarter’s average of $0.18 is a 33% year-over-year decline, which may indicate that this year transaction-driven advertisers casted a wider net for targeted users than they did during Q1 2018.

-19%QUARTER/QUARTER

-22%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

$0.62

$0.48

CPC - GLOBAL

-12%QUARTER/QUARTER

+26%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

$1.10$1.39

CPC - APP INSTALL

+2%QUARTER/QUARTER

+25%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

$1.00

$1.25

CPC - LEAD GENERATION

-31%QUARTER/QUARTER

-33%YEAR/YEAR

Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019

$0.26$0.18

CPC - TRANSACTION

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AMERICAS

1.1%CTR

-8% Q/Q$1.02CPC

-12% Q/Q $10.81CPM

-19% Q/Q

EMEA

0.9%CTR

-8% Q/Q$1.20CPC

-4% Q/Q $11.07CPM

-12% Q/Q

APAC

2.0%CTR

+5% Q/Q$0.19CPC

-18% Q/Q $3.96CPM

-14% Q/Q

GEOGRAPHIC TRENDSINTERNATIONAL PERFORMANCE INSIGHTS

The Facebook advertising ecosystem can vary from region to region, and marketers should always tailor their performance goals and strategies for each geographic market. To give advertisers insights on global trends, Nanigans analyzed campaigns targeted to specific countries in Q1 2019. To ensure statistical significance, country spend, clicks, and impression data is grouped into geographic regions—1) The Americas*; 2) Europe, Middle East, and Africa (EMEA); and 3) Asia-Pacific (APAC).

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