Methodology

To understand device and platform performance for Q3 2015, we sampled the Marin Global Online Advertising Index, which looks at over $7.2 billion worth of spend in the Marin platform. The Index primarily consists of enterprise-class marketers – larger advertisers and agencies that spend in excess of $1 million annually on paid search, display, social, and mobile.

As such, our data sample and findings skew towards the behavior of larger organizations and more sophisticated advertisers. We focused on a set of marketers who advertised on Facebook for over a year to allow accurate year-over-year (YoY) comparisons.

We kept the study longitudinal by focusing on a representative set of US advertisers who’ve been active on Marin for the previous five quarters, and measuring key performance indicators (KPIs) on a YoY and quarter of quarter (QoQ) basis. We rebuilt our client index data pool as part of an annual data refresh in Q1. This could result in slight variations in prior quarter data previously reported, but will make the analysis and findings more representative as we move forward.

Findings

Peopleare clicking Facebook ads

Social media ad targeting has been getting better and better each quarter. Year over year, advertisers on Facebook saw click-through-rates more than double. While the amount of ad impressions decreased year over year, clicks rose dramatically. What this signals is that ad quality increased, while ad serving became much more selective and targeted, and consumers are more likely to view and click when they’re served with Facebook ads.

Cost-per-click has also been decreasing year over year, stabilizing since early 2015. This improvement in ad engagement combined with lower costs has made Facebook a more attractive option for many advertisers.

Social and mobile area match made in heaven

Social media and mobile devices have tied the knot. Although Facebook originated on desktops, as smartphones and tablets gained in popularity and usage, so did mobile usage for social networks. Nowadays, most social media activity exists on mobile networks, with over 75% of all Facebook MAUs accessing the social network via mobile device. Many newer social networks – such as Instagram and Snapchat – have even deeper roots in mobile, requiring mobile apps or built for mobile usage. Throughout 2015, Facebook usage skewed more and more mobile, taking over the vast majority of clicks and spend.

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Local ads are more precise and effective than ever

Geotargeted ads really gained steam on Facebook during 2015, in no small part due to Facebook’s improvements to their local ad type. Hyper-local ad targeting on social media has allowed marketers to reach very specific audiences to within a mile of specific locales. This hyper-local targeting easily synergizes with mobile ad formats, such as clickfor-directions or click-to-call to reach nearby audiences that have high engagement rates for local brick-and-mortar businesses. Since 2010, locally targeted social media ads have grown a compounded 33% every year, with $8.3 billion worth of ads in 2015.

Social video is growing fast

Social video has gained traction over the past year and Facebook is finding a healthy level of success with video advertising on their social network. Video has proven to be one of the fastest growing sectors of online advertising in 2015 and Facebook has been very quick to pick up on this, with video ad formats entering the newsfeeds of users this past year.

According to Facebook, by the end of 2015 there were eight billion average daily video views, marking 100% growth within seven months. 2 This incredible growth is part of the reason Facebook is investing so much attention on improving and refining video ad formats to increase user engagement and relevance. There is a lot of potential for Facebook video ad sales to take off in 2016, and there is definitely a lot of attention on the seemingly bright future of this ad format.

Conclusions

Social media has become the pillar of many people’s online experience. While social media user behavior may be changing, usage is only increasing over time as social media networks grow in size. These networks are growing savvier, and the quest to engage and reach audiences more effectively will continue to evolve. Facebook ads have gone beyond awareness and branding campaigns, and are now recognized for their strength and potential to convert new audiences.

We believe that all of these developments will continue to gain traction throughout 2016. While the growth of social networks on mobile will inevitably slow and plateau, current trends show that consumer and advertiser attention on Facebook will continue to shift towards mobile devices for some time. We predict that we’ll see even further increases in user engagement on social media ads as they’re refined and become more hyper-targeted, and due to their cost-effectiveness, social media ads will become more popular for advertisers. With social and video continuing to take their place at the forefront of advertisers’ minds, this year promises to be an interesting one for Facebook marketing.