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esome price indexQ3/2018

esome advertising is a digital andsocial media advertising specialistlocated in Hamburg and Belgrade.The company currently employsmore than 130 people and is acertified Facebook, Instagram,Twitter, Snapchat and Xing MarketingPartner.esome advertising operates in thefield of „paid advertising“ andoptimizes performance and branding

campaigns in social media anddisplay.The esome approach is based oncomprehensive know-how andtechnology integration, aiming toachieve superior brand andperformance KPIs. The proprietaryesome technology and the team ofexperienced digital advertisingexperts are the heart of esome’swork.

About this price index

The data for this price index has been aggregated from more than 200 clients’social advertising campaigns in the German market spanning major industries.Data has been weighted depending on the clients’ spend. Data from Q3/2017serves as the basis and all subsequent quarters have been normalized againstQ3/2018.For the calculation of CTR and CPC, only campaigns with the objective „WebsiteTraffic“ have been adducted, Video content has been considered separately.

CPM serves as an indicator for media costs and the competition for advertisinginventory. The illustrated KPIs conduce to the cross-platform comparability anddo not necessarily represent the best practices of social advertising campaignexecution.The trends presented consecutively bear on data from social advertisingcampaigns that have been executed by esome advertising.

About esome advertisingMegatrend Video

Does the mega trend „video“ come to an end?For the first time in a long while, the spent onvideo advertising declined in Q2/2018 – reasonenough to take a look back at the developmentof video advertising on social over the pastyears.

The trends presented bear on data campaigns that have been executed by esome advertising and do not necessarily represent the whole market.

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2015 2016 2017 2018

InflationTotal Year YTD Quarter

• The inflation rate decreased slightly in the third quarter of the year (-1%)

• Compared to the third quarter of last year, prices for social media contacts were even eight percent lower in Q3/2018

• Considering the overall price trend from 2015-2018, there is still a considerable increase of 124% (YTD)

Diff YearDiff YTD

Diff Q

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37%49%35%

-1%12%-8%

38%34%45%


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2017 2018

TotalCost per Mille (CPM) Cost per Link Click (CPLC) Link Click-Through-Rate (LCTR)

• Within the last year, media could be purchased at the lowest price in the third quarter of 2018

• Although ad spending decreased this quarter, the spent is still higher than in Q3/2017

• With the exception of Snapchat, the CPM has decreased on all platforms; the CPM on Messenger has even been halved

• Although the CPLC on Messenger and Twitter almost doubled, the overall click costs declined

• The click-through rate rose to 1.06%, 0.23 percentage points above the previous year's level


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2017 2018

FacebookCost per Mille (CPM) Cost per Link Click (CPLC) Link Click-Through-Rate (LCTR)

• The biggest share of advertising budget was spent on Facebook and Instagram again

• The advertising spending on Facebook fell again in Q3/2018. This can be explained by the increased shift from advertising budget to Instagram

• Moreover, a declining CPM was recorded in the previous quarter on Facebook. However, the CPM on Facebook is still the highest in platform comparison

• The LCTR delivered the best value across platforms (1.26%), leading to the lowest CPLC in the considered period


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2017 2018

InstagramCost per Mille (CPM) Cost per Link Click (CPLC) Link Click-Through-Rate (LCTR)

• The increasing spent of advertisers on Instagram reflects the increasing importance of the platform

• After the CPM increased in the second quarter of this year, it reached its lowest level in Q3/2018, making it the cheapest media buyout in a year

• During the considered period, Instagram reached the highest LCTR (0.53%) and consequently the cheapest click price. In comparison with the entire Facebook universe, Instagram, however, reached the highest click price in Q3/2018


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2017 2018

Facebook Audience NetworkCost per Mille (CPM) Cost per Link Click (CPLC) Link Click-Through-Rate (LCTR)

• After a rise in advertising spending in the second quarter of 2018, it fell by 13% in the third quarter

• The CPM shows a similar trend: After it had risen in Q2/2018, the CPM decreased again. It reached the lowest value in the entire Facebook universe in the previous quarter

• The LCTR rose to 0.87% in the third quarter. As a result, CPLC declined, even reaching the lowest value in platform comparison in Q3


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2017 2018

MessengerCost per Mille (CPM) Cost per Link Click (CPLC) Link Click-Through-Rate (LCTR)

• Although the highest drop of advertising spend in platform comparison (17%) was recorded on Messenger in Q3/2018, Q3 spending on Messenger was six times higher than spending in Q3/2017

• The CPM has fallen again from Q2 to Q3. Thus, the CPM reached its lowest value so far and, for the first time, was not the highest value in platform comparison

• In contrast to the very good CPLC and LCTR of Q2/2018, the LCTR fell in the third quarter and the click price went up respectively


• After a brief recovery of the advertising spending in the second quarter, it fell again by 6% in the third quarter. Compared to Q3/2017, a decline of 30% was recorded

• The CPM reached the best value during the period under review

• During the considered period as well as in platform comparison, Twitter reached the lowest LCTR in the third quarter with only 0.34% and consequently the most expensive click price overall

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2017 2018

TwitterCost per Mille (CPM) Cost per Link Click (CPLC) Link Click-Through-Rate (LCTR)


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2017 2018

SnapchatCost per Mille (CPM) Cost per Swipe-up Swipe-up Rate

• In the third quarter, Snapchat experienced the highest increase in ad spend compared to the other platforms at just under 40%, which can be explained by attractive new ad formats and new targeting options

• Although the CPM has increased slightly, Snapchat offers the cheapest media buying in platform comparison for the second time in a row

• The Swipe-Up Rate rose slightly in the previous quarter (0.47%), resulting in a small decrease of the CPSU (Cost per Swipe-Up)

Megatrend „Video“


• After the megatrend "video" experienced a remarkable decline in ad spend in Q2/2018, it recovered in Q3 and remained stable

• The 10-second CPV and the CPV have remained constant since the previous quarter

• At the same time, the view rate has increased slightly based on the 10-second views. However, the values of the previous year could not be achieved0,00%

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2017 2018

VideoCost per View (CPV) CPV 10sec View-Through-Rate 10sec (VTR)


was the average CPV across all platforms*.

of total ad spend* on social were spend on campaigns with video creatives.

of video ad spend* were spent on Facebook.

* Average of considered period: 2015 - today

0,07€

40%

80%

Video


While video advertising spend on Facebook has continued to decline over the year, Instagram is seeing a rising trend. Advertising spend on Instagram videos is currently higher than ever.

The ad spend for campaigns with optimization goal “Video View” declined clearly in 2018.

Videos are increasingly used for reach campaigns. Video ad spend was as high as ever for this optimization goal in Q3/2018.

Video

Does the mega trend „video“ come to an end? • For the first time in a long while, the spent

on video advertising declined in Q2/2018. However currently no further decline can be monitored

• Videos are increasingly used for reach campaigns

• Especially Instagram is seeing a rising trendConclusion:The mega trend „video“ might have reached its peak but it is far away from not being popular anymore.

Forecast

esome advertising technologies GmbHHohe Bleichen 1120354 Hamburg

www.esome.com | [email protected]

Can you already hear the Christmas bells and smell the cinnamon stars from afar? Christmas is coming! We will be scrutinizing this year’s Christmas rush on the social platforms again and analyze the impact on advertising activities in the social advertising environment.

But we can tell more stories than stories about Christmas: apart from Instagram, Facebook’s Stories are becoming more popular and offer advertisers plenty of opportunities. The development from feed usage to story usage and its importance for advertising activities will be considered in the next price index.

Have a successful Q4and happy holidays!

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