2016 Facebook Advertising Preview: 4 Trends To Act On
Following Facebook's impressive Q3 earnings last week, columnist Andrew Waber highlights some key advertising trends on the social network that marketers should take heed of for 2016.
During Facebook’s third-quarter earnings call, CEO Mark Zuckerberg and COO Sheryl Sandberg both hit extensively on the power of video for advertisers and users alike. At Nanigans (my employer), we have observed the promising comparative efficacy of Facebook video ads across a variety of gaming clients. Certainly, it’s a format worth the attention of advertisers, but it’s not exactly new.
However, as advertisers gear up for Q1, there are a number of trends Facebook didn’t necessarily touch on during the earnings call that paint a changing landscape for Facebook advertising moving forward. The following are some of the trends that advertisers should take note of and act on.
1. Carousel-Type Ad Formats Are Ascending
Now one of the more popular ad units among the Facebook advertisers we work with, Carousel Link ad units attracted 55 percent more spend between the second quarter and the third quarter of 2015. This was the highest quarter-over-quarter increase for any ad type by a significant margin.
This is happening for a reason — Carousel performance has generally been better as compared to traditional static units. Additionally, Carousel ads give advertisers an opportunity to interactively promote one or more offerings to better entice, and possibly upsell, a prospective customer.
With performance justifying spend across a substantial time frame, increasing amounts of advertiser budgets will be committed to these unit types in 2016. Facebook is looking to bolster adoption, as well, with Carousel and Dynamic Product Ads both getting substantial support from the company.
Look into testing out these units, if you haven’t already.
2. Prices On Facebook Keep Rising, But No One Is Shying Away
Advertisers have remained undaunted in their activity on Facebook despite the continuation of a long-standing CPM growth trend. Among our advertisers who were using the software in both Q2 and Q3, Facebook ad budgets increased 16 percent quarter over quarter.
The rate of CPM growth varies by vertical, but it is mirrored by a corresponding increase in CTR (click-through rate). Certainly, everyone would love lower prices, but these healthy engagement metrics, along with robust targeting capabilities, are what draw advertisers to Facebook, increasing the demand for inventory but also ROAS (Return On Advertising Spend), which is still substantial in many cases.
Facebook’s bread and butter is keeping advertisers happy with the platform’s performance, so they continue to spend. So while prices are likely to continue their ascent to some degree in 2016, engagement rates are likely to follow.
Now more than ever, advertisers need to be very cognizant of practicing proper testing methodologies in order to maximize their ROI (return on investment) on the platform.
3. Growing Viability Of Facebook Advertising In International Markets
International markets are showing signs of being much more feasible options for Facebook advertisers. Facebook ad engagement rates took a noticeable jump in Q3 2015, going up 96 percent from the prior year to reach 0.9 percent — a CTR close to that of the Americas’ 1.0 percent.
The Asia Pacific (APAC) region, in particular, was a big driver, as CTRs were actually the highest of any geographic region. This wasn’t lost on advertisers, who collectively committed a five percent greater share of their budgets to international traffic in Q3 compared with the prior quarter.
While every market is different, advertisers who are looking to make Facebook ads work outside of the US should feel more confident heading into 2016. As the Facebook ad ecosystem continues to mature across countries that are newer to the platform, advertisers who creatively and appropriately promote will see improved engagement rates and more accessible ad options from even one year ago.
4. Mobile Value Vs. Desktop Increasing For US Advertisers
With lower CPMs and an outsized share of purchases traditionally occurring on desktop, US e-commerce advertisers have historically been more averse to mobile, as compared to other verticals. This is abundantly clear looking at e-commerce-specific data from 2014.
What’s happened since that time is that thanks to a number of factors, including the larger shift to mobile devices limiting available inventory, desktop CPMs have increased considerably, and are now fairly close to their mobile counterparts.
Additionally, mobile e-commerce purchase-related metrics have shown signs of catching up to desktop.
E-commerce advertisers should take advantage of these shifts by committing more heavily to mobile in 2016.
Of course, marketers looking to act on any of these trends need to ensure careful rollouts, using methods to eliminate waste while testing extensively to maximize ROI.