Brands Pump More Money Into Smarter Ads

No doubt, it’s getting harder for brands to connect with consumers on Facebook. From undermining organic opportunities to its ever-changing algorithm, the app has never been less business-friendly.

In response, brands are pumping more money into smarter ads.

For example, among Nanigans’ ad clients, the share of total ad spend dedicated to dynamic ads increased by 135% from the fourth quarter of 2016 to the fourth quarter of 2017.

After comparing data from the same advertiser set, the ad software firm found that spending on dynamic ads increased by nearly 300%, year-over-year.

From the third quarter of 2017 to the fourth, dynamic ads’ share of total ecommerce ad spend grew from 42% to 57% among Nanigans’ clients.

These figures clearly show that ecommerce marketers are relying more heavily on dynamic ads to reach customers with targeted promotions based on users’ online behavior, including adds to carts, site visits, and purchases over time.

For Shane O'Neill, director of content at Nanigans, it’s no surprise that ecommerce advertisers are spearheading the push toward smarter Facebook ads. “These marketers are highly performance-driven -- focusing on profitably scaling sales and revenue growth,” O'Neill notes in a new report.

Clearly, “They’re dramatically increasing spend on Facebook dynamic ads targeting mobile shoppers,” according to O'Neill.

More broadly, after dropping slightly from the second quarter of 2017 to the third, global click-through rates on Facebook rebounded in the fourth quarter.

The average of 1.88% represents a 23% increase quarter-over-quarter, and a 15% increase year-over-year.

Nanigans sees the effectiveness of dynamic ads at delivering clicks at scale across Facebook’s user base as a significant contributing factor to this rise.

Across Nanigans’ ecommerce advertisers, overall Facebook ad spend grew by 69% from the fourth quarter of 2016 to the fourth quarter of 2017.

Halfway through 2017, meanwhile, Facebook introduced its value optimizationfeature to help advertisers more effectively focus campaigns on anticipated purchase value.

As a result, the percentage of ad spend dedicated to Facebook value optimization grew from 1% to 17% among game advertisers, from the third quarter of 2017 to the fourth.

Value optimization tends to result in lower CTRs, higher CPCs, and higher CPMs than ads being measured by app installs and off-site conversions.

Yet, the share of gaming ad spend leveraging value optimization increased dramatically quarter-over-quarter -- growing by over 1,600% -- while the percentage of ad spend going to app installs increased by only 14%.

This all suggests strong early adoption of Facebook’s new optimization technology among game developers, and indicates that it’s delivering meaningful ROI despite higher costs and lower top-line engagement metrics.

2 comments about "Brands Pump More Money Into Smarter Ads".
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  1. Ed Papazian from Media Dynamics Inc, January 25, 2018 at 9:13 a.m.

    This article uses a sample of one---Nanigans. Is there any evidence that these shifts are projectable to all or most advertisers?

  2. Paula Lynn from Who Else Unlimited, January 25, 2018 at 9:57 a.m.

    Fine when you want to make sure you are not selling snowblowers in Florida, but caveat on other products/services such as real estate. Ultra focusing also misses opportunties to introduce and remind people about your company.

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