Performance on Facebook advertising for retailers is increasing significantly, meaning advertisers should feel confident about in their Facebook ad spends for the upcoming holiday season, according to a new report released by Nanigans.
The analysis of 100 retailers and more than 150 billion impressions found that retailers on Facebook were seeing 3.75x higher click-through rates (CTRs) compared to a year ago (0.20 percent in 2013 vs. 0.05 percent in 2012), and are averaging 152 percent return on investment (ROI) on those ads.
"Incremental sales have become core to retailer Facebook advertising goals, and measuring the true ROI of these efforts is being increasingly demanded," Nanigans COO Marc Grabowski said in a statement. "While every retailer has a unique customer base and their results and strategies vary, we’re excited to offer a benchmark report specific to the sector with meaningful metrics and actionable strategy recommendations."
Nanigans also found that the CPMs (cost-per-thousand impressions) increased an average of 37 percent from the first month the last month of the court, which highlights both an increase in traffic as well as an increase in the number of advertisers in the space.
The most interesting fact was the comparison of Facebook news feeds ads compared to the ad space on the right column. Ads placed within the news feed had a 28 times higher CTR compared to ads on the right side, but their ROI was a surprising 15 percent lower, according to the report. However, 57 percent of the ad spend on Facebook was on the news feed.
You can download the complete report here.