New Report Reveals Advertising Trends and Strategies for Facebook and Instagram

(Note: I published this blog post last week on our corporate blog to launch our Annual Advertising Index report; cross-posted here).

2015 was a monumental year for digital advertisers and consumers. . Everyone’s love for mobile grew, and 90% of our time spent with mobile devices is now done with apps. Not surprisingly, mobile-delivered advertising finally surpassed desktop in the U.S. (joining Europe and Asia, which previously passed the mark). Instagram launched its game-changing service to over 200,000 advertisers, and along with Facebook, accelerated the the adoption of digital video ads across the globe.

As we look forward to 2016, the pace of change will only grow. In our new Advertising Index 2015 Annual Report, we examine some of the biggest advertising trends on Facebook and Instagram. A few of the highlights that are sure to inspire you to adjust your advertising strategy this year include:

• In seven key markets, Facebook CPM and CTR both rose year over year, by 34% and 26% respectively
• CRM-powered ads have 47% higher CTR than traditional targeting on Facebook for website conversion ads
• The Instagram CPM in France and Germany was very similar, at €4.27 and €4.32, and the United States CPM was $4.04
• Over 20% of Video Ads on Instagram across the US, UK, and Australia were viewed in full

Facebook’s rise in CPM and CTR indicates that Facebook advertisers are increasingly able to drive engagement with their ads on the platform and show their ads to the right people.

 Q4 Drives Advertising Results

Due to normal seasonal trends, both digital and traditional, there is increased investment in advertising in Q4, particularly in industries like retail and e-commerce tied to events like Black Friday, Cyber Monday, Christmas, and Boxing Day. This past year, Facebook’s advertising revenue in the United States and Canada jumped from $2.1 billion in Q3 to $2.8 billion in Q4, an increase of 33%. At the same time, this increased demand drove CPM in the United States up by almost the exact same amount, 33%.

Brands (and Consumers) Value Ad Personalization
Brands have increasingly used customer data to run some of their most impactful marketing programs. Using ad products like Facebook’s Custom Audiences, brands are able to accurately reach their own customers, build Lookalikes from a seed audience (i.e., high value customer, recent email openers, etc.) and better coordinate their advertising messaging on channels like Facebook, Instagram, and Facebook Audience Network with customer actions in other channels.

In Q4 across our customer base, ad campaigns with the objective to have users convert on a website that target a Lookalike Audience have a 24% higher CTR, and ones that target a Custom Audience have a 47% higher CTR for ads than non-brand data-powered advertising.

 Instagram Gets Instant Ad Results

Instagram recently announced a milestone of 200,000 advertisers on the platform, which shows rapid brand adoption given the platform has been generally available less than two full quarters. Advertisers today see it as a great platform to reach the 400 million monthly active users, essentially all of which use the platform on mobile. Instagram’s success in the United States, France and Germany are testament to its rapid acceptance. In the Advertising Index 2015 Annual Report, we also dove into video view rates on Instagram because it has become a key platform for advertisers to have specific consumers watch their videos as a part of the customer journey. In fact, in the United States, over two-thirds of video ads were watched more than 50% of the way through, and across the markets we looked at, over 20% of video ads were viewed in full. 

Download the Advertising Index 2015 Annual Report for many more data-highlights, including:

• Key performance metrics by industry across Australia, France, Germany, the United Kingdom, and the United States.
• Mobile app install costs across 17 markets, and how they caused cost per mobile app install (CPI) on Facebook to rise 32% year-over-year.
• Twitter trends and how the cost per engagement (CPE) on Twitter has risen over six times year over year.
• LinkedIn trends, including media costs in Australia, the U.K., and the U.S.