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Portland, OR97204
1.503.294.7025
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WHITEPAPER / JANUARY 31, 2011
Faceboo k A dve rtis in g P e rfo rm an ceB enchm arks & In s igh ts
EXECUTIVESUMMARY
Facebook advertising is predicted to hit US$4 billion this year, which is
twice the volume of 2010 spending according to eMarketer. While brands
are rapidly investing in the space, they lack comparative experience to
assesshow well their campaigns are performing. Webtrends has analyzed
over eleven thousand campaigns to provide performance benchmarks
brands can use to evaluate their own campaign performance.
LOTSOF AD DATA
Webtrends has amassed a large
data ba se o f Face book adv ertis-
in g campa ig n resu lts. H ere a re afew stats on the volume of data
ana ly zed fo r th is r epor t.
4.5 billion impressions
2.2 million clicks
11.2 thousand ads
1.5 thousand campaigns
The Webtrends database is a very large sample given
the relatively young age of the Facebook ad network
(see the stats at left). We focused on a few key metrics:
• Click-Through Rate (CTR)
• Cost per Click (CPC)
• Cost per Thousand (CPM)
• Cost per Fan (CPF)
LESSCLICKSFOR MORE MONEY
From 2009 to 2010 the average CTRdropped while the
costs increased. This is a typical pattern for display ad
networks as the audience becomes more savvy and
demand causes prices to rise. Brands investing now
will save money building their Facebook ad programsnow by taking advantage of currently low rates that
will continue to increase over time. Facebook's top
advertisers have increased their ad spend 10 fold.
OVERALL CAMPAIGN PERFORMANCE AVERAGES FOR 2009-2010
YEAR CPC CPM CPFCTR
2009 0.063% US$ 0.27 US$ 0.17 N/A
2010 0.051% US$ 0.49 US$ 0.25 US$ 1.07
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' * ' 0.2c : : :
t0,15
0,070%
0.060%
0.050%
' * ' 0.040%c : : :
t0,030%
0.020%
0.010%
0.000% ~---~---~---~---~----~--~
18-24 25-34 55-64 65-10035-44 45-54
-M-F
AGE AND GENDER INCREASE OUR CTR
Age and gender appear to have a direct impact on how much we click on
Facebook ads. The older we get, the more we click; that is until we reach
65. Women are just as likely to click as men when they are 18-24, but
grow more likely to click with age.
STATE HAS LITTLE TO NO IMPACT ON CTR
While geographic targeting plays a strong role in delivering the
appropriate content to local audiences, it has virtually no impact on the
rate at which people click on ads. There are a few exceptions:
• Hawaii has a noticably lower CTRat almost half the average
• North Dakota and Wyoming have CTRsthat are double and triple
the average
0.3
0,35
0,25
g i g I D I D m g
I I I I I I I I I I
0.1
0,05
°
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0.20 0.15
He alt h Ca re
I nt er ne t a nd So ft war e
Co nf er en ce a nd E ven ts
G r oce ry S tor es
Telecommunications
F inanc ial Se rv ices
Loca l Se rv ices
Ho us in g a nd Re al E s ta te
Misc.
Co ns ume r P a ck ag ed Go od s
Restaurants
Retailers
Cosmetics
S ta rt U ps
Non-profits
Automotive
Travel
E-commerce
Med ia and En te rt ai nmen t 0.154%
T a blo id s a nd B lo gs 0.165%
0.10 0.05
«CTR CPC»
00.0 0.3 0.6 0.9 1.2 1.5
0.011% ••••••••••••••• $1.27
0.021% ••••••••••••• $1.03
0.028% •••••••••• $0.67
0.029% ••••••••••• $0.79
0.029% •••••••••• _ $0.82
0.030% ••••••••••• $0.80
0.033% •••••••••• $0.67
0.058% ••••••••••• $0.56
0.058% ••••••••••• $0.54
0.065% •••••••••• $0.38
0.066% ••••••••••• $0.53
0.070% ••••••••••• $0.50
0.072% •••••••••• $0.37
0.074% •••••••••••• $0.50
0.077% •••••••••• $0.29
0.082% •••••••••• $0.26
0.086% ••••••••••• $0.36
0.089% ••••••••••• $0.31
••••••••••••• $0.25
••••••••••• _ $0.12
SOCIA L B RA NDS P ERFORM B ETTER
In a recent international survey by DDB,fans stated that they arestill primarily on Facebook for fun. Therefore it stands to reason that
industries that are fun to discuss with our network are seeing higher CTR.
F A CEB OOK REWA RDS SOCIA L B RA NDS W ITH CHEA PER P RICES
Brands that are social get a higher CTR,which translates into better
engagement metrics: Post Quality Score, EdgeRank, Feedback Rate, and
others. In turn, Facebook rewards such behavior with a lower cost per
click and greater visiblity in the News Feed.
webtrends
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W irn F RE E D ucks , G ear!
Dreg/oil Ducks Fallatics is,
giving away F re e D lI ck s
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Chane€! w O Win!
Heather jenkms, Chr ist ine
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friends liike this.
r J 6 Uke IFRIEND OF FAN
Targe ting f ri end s o f you r
fa ns i ns er ts y ou r fa ns '
nam es below your ad.
webtrends
0.043%
Interest
0.057%
0.049%
0.023%
FoF Interest FoF
A VERA GE CTR OF TRA FF IC THA T
D IDN 'T A TTEND CO LLEG E
A VERA GE CTR OF TRA FF IC
THA T A TTENDED CO LLEG E
WHA T IMP ACT DOES EDUCA TION LEVEL HA VE ON CTR?
For this analysis we used a subset of ads that specifically targeted
education levels.
EVERYONE CLICKS MORE IF A FR IEND LIKES A N A DThe bottom line is that regardless of education level, everyone clicked
more if an ad had a friends' name appear at the bottom of the ad.
F A NS THA T D IDN 'T A TTEND COLLEGE CLICK ON MORE A DS
All things being equal, fans that didn't attend college were more likely to
click on ads than fans who did attend college.
F ANS THA T A TTENDED COLLEGE A RE TW ICE A S L IKELY TO CLICK IF A
F RIEND LIKES IT
Sure, the fans who attended college have a lower CTR,but if you usefriend of fan targeting, then the CTRmore than doubles. It was the largest
impact when comparing education level on interest and friend of fan
targeting, which suggests that social endorsement means more to fans
with a college background.
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BENCHMARKS
All of our ad stats created very smooth distribution curves, which tells
us that the sample size was statistically sound. These benchmarks will
help you determine where your ads stack up making it easier for you to
know when to high five your coworker and when it's time to go back to
the drawing board. The inflection point is middle of the curved portion of
the line and is a good line of demarcation to say that if you're above the
inflection point, you're doing well. Remember, most ads are below the
inflection point.
1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
o
J_ . ,
CTR DISTRIBUTION
INFLECTION .082%
CPC DISTRIBUTION
INFLECTION US$0.83
30~---------------------------
15+---------------------------~
7
_,.)
25+---------------------------~ 6
20+---------------------------~ 5
4
3
10+---------------------------~
2
5+---------------------------+
OL_--------------~~====~~- o
CPF DISTRIBUTION
INFLECTION US$1.75
CPM DISTRIBUTION
INFLECTION US$0.52
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webtrends851 SW 6th Ave., Suite 1600
Portland, OR972041.503.294.7025
fax: 1.503.294.7 130
Webtrends Sales
1.888.932.8736
sales@Webtrends.com
Europe, Middle East, Africa
+44 (0) 1784415700
emea@Webtrends.com
For offices worldwide, visit:
www.Webtrends.com
ABOUT THIS REPORT
This report contains analysis of over 11 thousand ads and is intended
to provide market reference for Facebook ad performance. It is worth
noting that the majority of campaigns we analyzed were focused on fan
acquisition, which may skew some of the results. Benchmarks may vary
for campaigns aimed at websites or fan nurturing campaigns. We did
not have a statistically significant data set for the 13-17 year old market,
so we excluded them from our results. Industry results were based on
categorizing campaigns in our dataset, which means some industries
had only a single brand and may not be representative of an industry's
performance overall.
Special thanks to Dennis Yu, Nicholas Davies, Jonny Chan, Michael Girard,
and Tim Mather for their contributions to this report.
CITATIONS
Facebook Advertisers Boost Spending 10 Fold, COO Says; BusinessWeek;
http://www.businessweek.com/news/2010-08-04/facebook-advertisers-
boost-spending-10-fold-coo-says.html; August 2010
Facebook Drives USSocial Network Ad Spending Past $3 Billion in 2011;
eMarketer; http://www.emarketer.com/Article.aspx?R=1008180; January
18,2011
Facebook and Brands survey; DDB & Opinionway; https://
ddbworldwide-dropboxaliciabrindak2.pbworks.com/f/
DDBOpinionwayFacebookenglishshortversion.pdf; October 18, 2010
ABOUT WEBTRENDS
Webtrends is a global leader in social and mobile marketing. Thousands
of global organizations, including Microsoft, Reuters, General Mills and
Ticketmaster have chosen Webtrends business solutions and client
services expertise to optimize their customers' online experiences.
Webtrends was the first web analytics company, founded over 15 years
ago and continues to deliver world class analytics solutions.
Webtrends is a registered trademark of Webtrends Inc. in the United
States and other countries. All other trademarks and registered
trademarks are the properties of their respective owners.
© 2011 Webtrends Inc. All rights reserved.