Facebook ad effectiveness rises

21 October 2013
THETFORD CENTER: Conversion rates for ads on Facebook were 2.36 times higher in the third quarter of 2013 and retail click-through rates have risen 3.75 times over the past year, two new surveys have revealed.

As well as finding conversion rates more than doubled since the last quarter, Kenshoo Social, the marketing technology platform, also found revenues up 2.16 times, conversion volumes up 2.85 times, and recorded a tripling of return-on-investment, Marketing Charts reported.

Its research covered 85bn ad impressions across a representative sample of major brands, discovering that ad impressions rose 13%, click volumes increased 14.4% and cost-per-click reduced 9% over the quarter.

It said there were three main reasons for Facebook's improved performance, such as improvements to its advertising products to make them more engaging and delivering enhanced audience targeting capabilities.

Secondly, Kenshoo said Facebook users were becoming more engaged with brands after viewing more relevant ads and, third, brands have become better at promoting their most relevant products, improving their ad customisation capabilities.

In a separate study from Boston-based Nanigans, a real-time bidding platform that is one of the biggest buyers of Facebook ads, Facebook was found to have delivered an average 152% return-on-investment over the past year while click-through rates rose 3.75 times.

Significantly, its survey of more than 100 retailers and almost 200bn ad impressions found that revenue-per-click on iOS was 6.1 times higher than on Android during the first three quarters of the year, and return-on-investment rates were 17.9 times higher.

With the data revealing return-on-investment rates of +162% on iOS, but -10% on Android, Venture Beat said this signalled that brands are actually losing money by advertising on that platform.

Data sourced from Marketing Charts, Kenshoo Social, Nanigans, Venture Beat; additional content by Warc staff
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