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Earlier this year, in the spirit of the 2012 Olympic Games in London, we (Kenshoo Social) held an international competition of our own to see which countries offered the best opportunities for Facebook advertisers. We analyzed aggregate global data across a wide range of brands whose Facebook ad campaigns are managed through the Kenshoo Social platform. Originally, the dataset included more than one hundred countries, but to ensure a level playing field we pared it down to only those countries that reached a statistical significance of at least 100 million impressions from ads that were uniquely targeted to each country.
The participants – Austria, Brazil, France, Germany, India, Italy, Mexico, Switzerland, Turkey, the United Kingdom, and the United States – competed across six key “events” to see who could take home the most medals. The events included a “marathon” that calculated average cost-per-thousand (CPM) impressions, the “100 meters” or average cost-per-click (CPC), the “200 meters” or average click-through rate (CTR), “archery” or average frequency for delivery, “football” (a.k.a. “soccer” here in the U.S.), which examined average exposure rate, and “BMX,” which looked at the maximum recommended bids.
Let the games begin!
In our first event, the “marathon,” Mexico brought home the gold with an average CPM of $0.069! The U.S. came in a distant last place with a CPM average of more than $0.30. Facebook advertising’s popularity in the U.S. creates increased attention and bid competition, ultimately inflating the average CPM.
Next up, in the “100 meters,” Mexico again wins the gold medal with an average CPC of $0.19. And once again, the U.S. finishes a distant last with an average CPC of nearly $0.90. Similar to average CPM, average CPC rates in the U.S. trend higher than in other countries because of the popularity of Facebook advertising. For advertisers to effectively compete in the U.S., they must use advanced targeting techniques and sophisticated bid algorithms and continue to refresh creative assets often.
In the “200 meters,” India scores its first and only gold medal with an average CTR of 0.048 percent. The U.S. finally finishes in the top half of the field, coming in fourth with an average CTR above 0.03 percent.
Event number four brings us to “archery.” Judging for this event was based on frequency, a metric that reflects the number of times the average person gets exposed to an ad. Ideal frequency represents the number of times an ad should be displayed, before its effectiveness begins to decay. In an earlier report titled “Social Media Insights: Metrics that Matter,” Kenshoo Social determined the ideal frequency was six and awarded medals to countries with an average frequency of six or less. Switzerland brought home the gold, their only medal in these events, with an average frequency of 5.81. The U.S. again finished near the middle of the pack with an average frequency near eight.
Our “football” event used another metric uncovered in the “Metrics that Matter” report: Exposure Rate, which represents the percentage of the entire desired target audience that an ad actually reaches. In a landslide, Turkey wins the gold with an average Exposure Rate of 51 percent! The U.S. again finishes dead last, though it’s important to note that, with the highest average CPM, it was significantly handicapped with considerably higher budgets required to reach the total target audience.
In BMX, our sixth and final event, Italy wins its only gold of the games with a maximum recommended bid of $0.16. The U.S. finished second to last with a maximum recommended bid slightly more than $1.00.
The final tally
With our six events in the bag, we present the final medal count in Kenshoo Social’s 2012 Social Media Advertising Global Games competition:
Mexico and Turkey tied for the lead with four medals each, with India and Italy finishing a close second with three each.
But what does this mean for Facebook advertisers?
First, there is great opportunity in countries with high Facebook penetration. Mexico and Turkey actually have as many Facebook users as broadband subscribers, indicating Facebook is used heavily via mobile devices in those countries. Savvy marketers can reach these connected populations through targeted mobile ads and take advantage of efficient Facebook CPM rates.
Second, countries like Italy with a high CTR could be a boon to advertising efforts as a high CTR indicates a willingness to interact with Facebook ads. Combined with a low maximum recommended bid, Italy appears to be a prime target for advertisers who want to test Pan-European campaigns on a smaller budget.
While U.S. Facebook advertisers may be discouraged by these results, Facebook advertising still offers a great opportunity in the U.S.; advertisers just have to approach their campaigns with a finely tuned plan of action. Facebook boasts one of the most expansive communities worldwide, so any target audience imaginable uses the social network. To reach an intended audience, advertisers must use as many defining traits as possible to specifically target ads to the interests and people for whom they’ve been designed. Luckily, Facebook’s data is rich and expansive enough to enable advertisers to do so.
There’s more data in the complete complimentary report, entitled “2012 Social Media Advertising Global Games,” including detailed charts, definitions and insights, which can be downloaded at www.Kenshoo.com/GlobalGames.
– Todd Herrold