Q2 Facebook advertising: cost and engagement increases signify rising tide, better ad types
Published: July 27, 2016
Author: Brad O'Brien
The major themes of our review of Facebook’s ad performance in Q1 2016 (more competition, better performance, wider mobile adoption) continued to dominate Q2, we found when crunching data from April-June across our top accounts.
In our study of Q2 Facebook performance (accounting for more than 267M impressions), we found that the effects of greater adoption and competition and more effective ad types are pushing CPC, CPM, and CTR higher – and that the percentage of spend on mobile is now 55.5% (up 13% from Q1) despite mobile clicks and impressions still costing far less than their desktop counterparts.
Comparing Q2 to Q1, CPCs rose 6% and CPMs rose 11%, on average. More advertisers continue to flock to the social platform by the day because Facebook keeps proving its ability to drive results from the top to the bottom of the funnel. The performance and cost comparison is as follows:
As for mobile, the numbers are hardly surprising (see chart below for cost and performance deltas in Q2): less expensive CPCs and CPMs and higher CTRs make mobile an attractive placement. While desktop still produces higher conversion rates on average, Facebook is actively working to combat that with mobile-first ad products like Lead Ads. The best strategy in our opinion is still one that leverages the distinct advantages and disadvantages of each placement to arrive at the most efficient total CPA/CPL/CPI.
The outlook for Q3 and beyond
While Q1 was all about new ad products and ad enhancements (Lead Ads, Canvas, Video enhancements), Q2 and early Q3 were all about targeting enhancements, including a trio of Custom Audience refinements that have, among other things, significantly improved match rate (early reports have matching percentages consistently by double digits). We certainly expect to see adoption numbers – and, as a result, costs – continue to rise, but yet to be measured is the mitigating effect of improved performance/engagement that these features should bring.