Q3 report: Facebook's ad revenue continues to grow significantly
In their third-quarter reports, both Kenshoo and Mikul noted that advertisers are increasing their investments in Facebook.
According to data released last week by Kenshoo,Advertisers are expected to spend 45 percent more on Facebook, including Instagram and Facebook's Audience Network, in the third quarter than last year. Clicks in Facebook's ecosystem also grew steadily in three quarters, up 14 percent from a year earlier.Kenshoo's analysis suggests that these increases are due to Facebook's advances in advertising formats and targeting.
Kenshoo serves hundreds of corporate customers who advertise on Facebook. Facebook advertisers who have partnerships with Kenshoo include Sears, Ticketmaster and job search site CareerBuilder. Over the past few years, Kenshoo has tracked the effectiveness of Facebook ads. The findings found that advertisers not only serve ads on Facebook, but in some cases some are actually undervalued.
Dynamic product advertising is a major source of spending growth. This is a new type of advertising for Facebook that enables features such as re-targeting users with related products or users who have abandoned the site's shopping cart before converting.Dynamic product ads, or DPA for short, account for 42 percent of Kenshoo customers' ad clicks on Facebook and 12 percent of their ad spending. Last year, the figure was just 15% and 8%.
DPA doesn't work for all e-commerce businesses, but advertisers who use DPA find that DPA gives sales a big boost compared to using Custom Audiences (WCA) ads.
Video ads are still popular.E-commerce advertisers have been using video ads on Facebook for a long time, but it has a very high conversion rate, effectively returns investment, and is one of the fastest growing sections of vertical advertising.According to Kenshoo, advertisers increased spending on Facebook video ads in the third quarter, up 155 percent from a year earlier.
Mobile advertising spending rose 61% in the third quarter, thanks to a 47% increase in mobile exposure and a 79% increase in clicks.
In its third-quarter digital marketing report, Meikul said advertisers' spending on Facebook rose 63 percent from a year earlier. Although Facebook's desktop advertising platform, Facebook Exchange (FBX), is about to close, advertisers are willing to transfer the advertising spend on Facebook Exchange to other Facebook ads.
At the same time, both reports noted a phenomenon in which Facebook's CPC prices continued to fall, while CPM prices rose year by year. This may have something to do with the growth of advertisers in Facebook's "sponsored content" business.
In the Kenshoo report, the agency saidAverage CPC prices on Facebook have fallen back to where they were a year ago, from a peak of $0.35 in the fourth quarter of 2015 to $0.25 in the third quarter of this year. But CPM prices continued to rise, up 25 percent from the third quarter of last year to $3.54.
Mikul reportsCPC prices are down 22% year-on-year and CPM prices are up 38% year-on-year.Mr Mikul said advertisers' spending on Facebook had not fallen despite the fall in CPC prices. Because last year's Internet traffic also increased significantly.
With an increasing international user base and more advertising products and platforms, Facebook is becoming a must-have advertising channel for advertisers. For the internet giant, which accounts for 96.9 per cent of its advertising revenue, the third-quarter reports from the two companies are no doubt evidence of Facebook's potential impact in the global advertising market.
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