This document provides an overview and analysis of key performance indicators (KPIs) for Facebook advertising among retailers from Q3 2012 to Q3 2013 based on data from over 100 retailers leveraging Nanigans' predictive lifetime value platform. Some of the key findings include: - Retailer Facebook click-through rates increased nearly 4x from Q3 2012 to Q3 2013, with the largest quarterly increase from Q4 2012 to Q1 2013. - Cost-per-mille (CPM) prices increased over 2.5x from Q3 2012 to Q3 2013, with prices spiking each quarter's last month. - Despite price increases, return on ad spend (ROI)

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Predictive Lifetime Value
In
This
Report
Part I: Overview & Methodology
Introduction
Report Goals
Data Overview
Key Performance Indicators
RPC and ROI Calculations
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Part II: Global Retail Facebook Advertising KPIs
Figure 1: Retail Facebook CTR, Q3 2012 – Q3 2013
Figure 2: Retail Facebook CPM, Q3 2012 – Q3 2013
Figure 3: Retail Facebook CPC, Q3 2012 – Q3 2013
Figure 4: Retail Facebook RPC, Q3 2012 – Q3 2013
Figure 5: Retail Facebook ROI, Q3 2012 – Q3 2013
Strategy Recommendations
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Part III: Retail Facebook Mobile Advertising KPIs
Figure 6: Facebook Advertising Budget Allocation to Mobile
Figure 7: Retail Facebook Mobile Budget Allocation, by OS
Figure 8: Retail Facebook Mobile CPMs, by OS
Figure 9: Retail Facebook Mobile CPCs, by OS
Figure 10: Number of Retailers Tracking Revenue from Facebook Mobile
Figure 11: Retail Facebook Mobile RPC, by OS
Figure 12: Retail Facebook Mobile ROI, by OS
Figure 13: Retail Facebook Mobile Engagement and Return, CTR vs. ROI
Strategy Recommendations
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Part IV: The Shift to News Feed
Figure 14: Retail Budget Allocation on Desktop, by Delivery Location
Figure 15: Retail KPIs on Desktop, by Delivery Location
Figure 16: Retail Facebook Budget Allocation, by Ad Type
Figure 17: Retail Facebook CTR, by Ad Type
Figure 18: Retail Facebook ROI, by Ad Type
Figure 19: Retail FBX Budget Allocation, by Delivery Location
Figure 20: Retailer FBX CTR and ROI, by Delivery Location
Strategy Recommendations
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Part V: The Shift from Proxy Metrics to Lifetime ROI
Figure 21: Retail Facebook CTR and ROI, by Gender
Figure 22: Retail Facebook RPC and CPC, by Gender
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Figure 23: Retail Budget Allocation, by Age Range
Figure 24: CTR and ROI, by Age Range
Figure 25: Retail RPC and CPC, by Age Range
Figure 26: Retail Engagement and Attributed Revenue, by Day of Week
Figure 27: Retail Spend and ROI, by Day of Week
Strategy Recommendations
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Part VI: Key Takeaways for the Holiday Season
152% ROI in 2013, with 3.75X CTR increase from Q3’12 to Q3’13
37% increase in CPMs from first to last month of the quarter
iOS averaging 17.9X higher ROI than Android
74% of desktop spend is delivered in News Feed
Proxy metrics like CTR and CPC are not predictive of ROI
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Appendix: Technology & Team Behind This Report
Mission, Platform & Value Proposition
Our Great Customers
History & Team
Contact Information
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Part I: Overview & Methodology
Introduction
•
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•
•
Incremental sales have become core to retailer Facebook advertising goals
Measuring true ROI from these efforts is being increasingly demanded
Benchmark KPIs help retailers evaluate performance and market trends
Nanigans is uniquely positioned to offer meaningful benchmark KPIs given
– The volume of ad spend managed by retailers through its SaaS platform
– Its lifetime value based prediction, measurement and optimization platform
Report Goals
•
•
•
Provide retailers with actionable Facebook advertising benchmark KPIs
Surface trends specific to retailer CMO efforts worldwide
Offer strategy recommendations across a wide variety of parameters, sub categories
and views
Data Overview
All data, pricing, analyses and recommendations included in this report are specific to
advertisers leveraging Nanigans’ predictive lifetime value platform, and does not necessarily
reflect the data and pricing information across the entire Facebook market.
•
•
•
•
Companies: 100+ retailers, ranging from traditional to online only
Data analyzed: Facebook ad spend, impression, click and revenue volume
Scale: Comprised of nearly 200 billion Facebook ad impressions
Timeframe: First nine months of 2013, with comparisons to the prior year
Key Performance Indicators
•
•
•
Engagement: Click-through rate (CTR)
Pricing: Cost-per-impression (CPM) and cost-per-click (CPC)
Return: Revenue-per-click (RPC) and return on ad spend (ROI)
RPC and ROI Calculations
Definitions
• ROI is defined as return in sales revenue on the cost of the Facebook ad spend
• Consistent and statistically significant windowed revenue data is available from
Nanigans in aggregate as of September 2012
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A Conservative Approach
• ROI and RPC are underrepresented in this report due to a conservative approach
• Revenue for RPC and ROI is measured using a 30-day attribution window (while many
retailers leverage a longer attribution period); additionally, retailers measuring only first
purchase revenue are included in the analysis
• Outliers are excluded, such as retailers leveraging view-based attribution and those not
spending at scale
• Mobile revenues are not accounted for prior to March 2013 (Nanigans launched its
mobile revenue measurement, attribution and optimization solution in Q1 2013)
• The data for this report was compiled on October 1, 2013 and thus attributed revenue
from retailer ad spend in September 2013 is not fully realized (thus, both September
2013 and Q3 2013 ROI and RPC are significantly underrepresented in this report)
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Part II: Global Retail Facebook Advertising
KPIs
Consumer engagement with retailer Facebook ads as measured by click-through rates
(CTRs) has increased by a factor of 3.75 when comparing Q3 2013 to Q3 2012. (see
Figure 1). The greatest quarterly increase in engagement occurred from Q4 2012 to Q1
2013 – a 58% increase from 0.08% to 0.13%. This can be attributed in part to Facebook
broadly launching unpublished Page post ads in News Feed (see Part IV: The Shift to
News Feed). Global CTRs for the retail sector across desktop, mobile and Facebook
Exchange (FBX) increased from averaging 0.13% and 0.14% in the first two quarters of
the year to 0.20% more recently in Q3.
Figure 1: Retail Facebook CTR, Q3 2012 – Q3 2013
0.25%!
0.20%!
0.20%!
0.13%! 0.14%!
0.15%!
0.10%!
0.08%!
0.05%!
Sep '13!
Aug '13!
Jul '13!
Jun '13!
May '13!
Apr '13!
Mar '13!
Feb '13!
Jan '13!
Dec '12!
Nov '12!
Oct '12!
Sep '12!
Aug '12!
0.00%!
Jul '12!
0.05%!
Q3'12! Q4'12! Q1'13! Q2'13! Q3'13!
Retailer Facebook advertising CPMs have increased by a factor of 2.71 to $0.89 when
comparing $0.33 CPMs in Q3 2012 to the $0.89 CPMs in Q3 2013 (see Figure 2). One
trend apparent in charting historical CPMs on Facebook for the retail sector is the spike
in costs during the last month of each quarter (on average a 37% increase from the first
to last month of the quarter). This is likely due to heightened demand for inventory at
this time as brands and agencies rush to meet quarterly volume goals.
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Figure 2: Retail Facebook CPM, Q3 2012 – Q3 2013
$0.90 !
$0.89 !
$0.80 !
$0.70 !
$0.60 !
$0.61 !
$0.50 !
$0.40 !
$0.30 !
$0.33 !
$0.38 !
$0.43 !
$0.20 !
Sep '13!
Aug '13!
Jul '13!
Jun '13!
May '13!
Apr '13!
Mar '13!
Feb '13!
Jan '13!
Dec '12!
Nov '12!
Oct '12!
Sep '12!
Aug '12!
$- !
Jul '12!
$0.10 !
Q3'12! Q4'12! Q1'13! Q2'13! Q3'13!
Facebook advertising CPCs have decreased 27% from Q3 2012 to Q3 2013 for
retailers, and appear to be normalizing at $0.45 in recent quarters (see Figure 3).
Figure 3: Retail Facebook CPC, Q3 2012 – Q3 2013
$0.70 !
$0.62 !
$0.60 !
$0.50 !
$0.46 !
$0.45 ! $0.45 !
$0.40 !
$0.32 !
$0.30 !
$0.20 !
Sep '13!
Aug '13!
Jul '13!
Jun '13!
May '13!
Apr '13!
Mar '13!
Feb '13!
Jan '13!
Dec '12!
Nov '12!
Oct '12!
Sep '12!
Aug '12!
$- !
Jul '12!
$0.10 !
Q3'12! Q4'12! Q1'13! Q2'13! Q3'13!
When comparing average CPCs and RPCs, retailers can expect to reap greater value in
sales revenue than the cost of their Facebook advertising investments (see Figure 4).
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Figure 4: Retail Facebook RPC, Q3 2012 – Q3 2013
$1.80 !
$1.29 !
$1.23 !
$1.13 !
$1.50 !
$1.08 !
$1.00 !
$1.20 !
$0.90 !
$0.60 !
Sep '13!
Aug '13!
Jul '13!
Jun '13!
May '13!
Apr '13!
Mar '13!
Feb '13!
Jan '13!
Dec '12!
Nov '12!
Oct '12!
$- !
Sep '12!
$0.30 !
Q3'12! Q4'12! Q1'13! Q2'13! Q3'13!
* Q3’13 RPC is underrepresented; October revenue has not been fully realized and attributed to September ad spend
Despite price increases, with CPMs more than doubling from Q1 2013 to Q3 2013, the
ROI of Facebook advertising for retailers has remained positive – averaging 152% for
retailers leveraging Nanigans in 2013 (see Figure 5).
Figure 5: Retail Facebook ROI, Q3 2012 – Q3 2013
203%!
300%!
250%!
152%!
200%!
112%!
150%!
109%!
96%!
100%!
Sep '13!
Aug '13!
Jul '13!
Jun '13!
May '13!
Apr '13!
Mar '13!
Feb '13!
Jan '13!
Dec '12!
Nov '12!
Oct '12!
0%!
Sep '12!
50%!
Q3'12! Q4'12! Q1'13! Q2'13! Q3'13!
* Q3’13 ROI is underrepresented; October revenue has not been fully realized and attributed to September ad spend
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Strategy Recommendations
Recommendation #1: Performance focused retailers should frontload quarterly
budgets and increase budgets accordingly to avoid price inflation from heightened
demand for Facebook advertising inventory at the end of the quarter.
Recommendation #2: Retail CMOs focused on ROI should increase Facebook
advertising budgets, as the sector is achieving strong and increasing engagement and
return from their advertising investments.
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Part III: Retail Facebook Mobile Advertising
KPIs
Mobile represented 22%, 14% and 18% of overall retail Facebook ad spend in the first
three quarters of 2013. This contrasts to the distribution of spend across all sectors,
which Facebook reported averaging 30% in Q1 and 41% in Q2 (see Figure 6). This
indicates that retailers have a large opportunity in their adoption of Facebook mobile
advertising.
Figure 6: Facebook Advertising Budget Allocation to Mobile
Facebook average!
Retail!
41%!
30%!
22%!
18%!
14%!
?!
Q1 2013!
Q2 2013!
Q3 2013!
* Facebook had not released Q3 earnings on mobile advertising revenues at the time this report was published.
Facebook mobile advertising engagement, pricing and return varies for retailers by
operating system, be it Android or iOS. Retailers allocated their mobile budgets more
heavily on Android in Q1 and Q2; however, this allocation was spread more evenly
across operating systems in Q3 (see Figure 7).
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Figure 7: Retail Facebook Mobile Budget Allocation, by OS
100%!
75%!
Android!
50%!
iOS!
25%!
0%!
Jan!
Feb!
Mar!
Apr!
May!
Jun!
Jul!
Aug! Sep!
Facebook mobile CPMs have increased 16% from Q1 to Q3 of this year, averaging
$4.87 for Android and $4.99 for iOS (see Figure 8).
Figure 8: Retail Facebook Mobile CPMs, by OS
Q1 2013!
Q2 2013!
Q3 2013!
Average!
$4.99 !
$4.87 !
Android!
iOS!
Facebook mobile CPCs have increased 70% from Q1 to Q3 of this year, averaging
$0.18 for Android and $0.40 for iOS (see Figure 9).
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Figure 9: Retail Facebook Mobile CPCs, by OS
Q1 2013!
Q2 2013!
Q3 2013!
Average!
$0.40 !
$0.18 !
Android!
iOS!
Retailers are looking at Facebook mobile through the lens of driving incremental sales,
demanding the ability to understand how their Facebook mobile ad investments impact
their bottom line. An indication of this is represented in the number of retailers
measuring, attributing and optimizing their mobile ad investments for purchase revenue
and ROI – a number that has tripled from Q1 to Q3 (see Figure 10).
Figure 10: Number of Retailers Tracking Revenue from Facebook Mobile
Q1 2013!
Q2 2013!
Q3 2013!
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Retailers are realizing significantly greater return from audiences on iOS than audiences
on Android, as measured by both RPC and ROI (see Figure 11 and Figure 12). For the
first three quarters of 2013, RPC on iOS averaged 6.1 times higher than Android and
ROI on iOS averaged 17.9 times higher than Android.
Figure 11: Retail Facebook Mobile RPC, by OS
Q1 2013!
Q2 2013!
Q3 2013!
Average!
$0.94 !
$0.15 !
Android!
iOS!
* Q3’13 RPC is underrepresented; October revenue has not been fully realized and attributed to September ad spend
Figure 12: Retail Facebook Mobile ROI, by OS
Q1 2013!
Q2 2013!
Q3 2013!
Average!
162%!
-10%!
Android!
iOS!
* Q3’13 ROI is underrepresented; October revenue has not been fully realized and attributed to September ad spend
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When comparing engagement and return by operating system, it is clear that CTRs are
not a proxy for ROI. While Android averaged the highest CTR for the year at 2.73%, the
operating system also averaged the lowest ROI. In contrast, iPhone CTRs were lowest
at 1.25% yet generated far greater return (see Figure 13).
Figure 13: Retail Facebook Mobile Engagement and Return, CTR vs. ROI
ROI!
175%!
2.73%!
CTR!
162%!
150%!
3.00%!
2.50%!
125%!
2.00%!
100%!
1.25%!
75%!
50%!
1.50%!
1.00%!
25%!
0%!
0.50%!
-10%!
-25%!
0.00%!
Android!
iOS!
Strategy Recommendations
Recommendation #1: Higher funnel metrics like CTRs are not a proxy for ROI on
Facebook mobile, and retailers should ensure to test by device and audience.
Recommendation #2: Retailers should employ revenue tracking technology to better
understand the quality of customers acquired through Facebook mobile as well as the
mobile purchasing behavior of their customer base. Retailers are achieving increasing
return from their Facebook advertising efforts and lag other sectors in their adoption of
Facebook mobile, offering support for CMOs to increase budgets. This is especially the
case for retailers looking to gain first-mover advantages over competitors.
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Part IV: The Shift to News Feed
The fraction of retail Facebook ad spend on desktop delivered to News Feed has
increased steadily from Q1 to Q3, growing from averaging 35% to 74% of spend (see
Figure 14). Most recently in September, News Feed averaged 79% of spend on desktop
while right-hand side (RHS) averaged 21%.
Figure 14: Retail Budget Allocation on Desktop, by Delivery Location
100%!
75%!
RHS!
50%!
News Feed!
25%!
0%!
Jan! Feb! Mar! Apr! May! Jun!
Jul! Aug! Sep!
Engagement rates for retailer ads in News Feed on desktop and mobile generated on
average 26.4 times higher CTRs than RHS in the first three quarters of 2013 (see Figure
15). News Feed CTRs increased 18% from Q1 to Q3, averaging 1.19% most recently in
September, while RHS CTRs remained stable at 0.04% during the same period.
With regard to pricing, retail News Feed CPMs nearly doubled from Q1 to Q3, averaging
$5.48 most recently in September. CPCs in News Feed increased 69% during the same
period, averaging $0.56 most recently in September.
A more mature delivery location, the RHS remained more stable. RHS CPMs ranged
month-to-month from $0.22 - $0.26, averaging $0.24 for the year, and RHS CPCs
ranged from $0.49 - $0.63, averaging $0.55 for the year.
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Figure 15: Retail KPIs on Desktop, by Delivery Location
CTR!
News Feed!
CPM!
RHS!
News Feed!
CPC!
RHS!
RHS!
$6.25 !
1.20%!
$5.00 !
0.90%!
$3.75 !
$0.40 !
0.60%!
$2.50 !
$0.30 !
0.30%!
$1.25 !
0.00%!
$- !
$0.70 !
$0.60 !
$0.50 !
$0.20 !
$0.10 !
Ja
n!
Fe
b!
M
ar
!
Ap
r!
M
ay
!
Ju
n!
Ju
l!
Au
g!
Se
p!
$- !
Ja
n!
Fe
b!
M
ar
!
Ap
r!
M
ay
!
Ju
n!
Ju
l!
Au
g!
Se
p!
Ja
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Fe
b!
M
ar
!
Ap
r!
M
ay
!
Ju
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Ju
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Au
g!
Se
p!
1.50%!
News Feed!
Unpublished Page post ads – both photo and link versions – have been at the core of
increased budget allocation to News Feed (see Figure 16). Adoption of these ad
products grew from representing 20% of spend in March to 68% in September. With a
new format announced recently, retailers have increased spend on unpublished Page
post link ads, growing from representing 3% of spend in August to 15% in September.
With unpublished Page post ads touting testing and targeting benefits over organic
Page posts, the latter has decreased from comprising 39% of retail spend in Q1 to 1%
in Q3. Similarly, budget allocation to Domain Ads directing to External URLs has
decreased from representing 50% of retailer spend in Q1 to 19% in Q3.
Figure 16: Retail Facebook Budget Allocation, by Ad Type
100%!
Other!
Sponsored Story!
75%!
50%!
25%!
0%!
Jan! Feb! Mar! Apr! May! Jun! Jul! Aug! Sep!
Unpublished Page
Post (Photo)!
Unpublished Page
Post (Link)!
Page Post!
Mobile App Install!
Domain Ad to
External URL!
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Of note with Facebook’s recent simplification of ad products, sponsored stories and
other ad types such as sponsored results have collectively represented only 1.4% of
retailer Facebook ad spend in the first three quarters of 2013.
In examining the most widely adopted Facebook ad products by retailers, it is evident
that CTR is not a proxy for ROI (see Figure 17 and Figure 18).
Figure 17: Retail Facebook CTR, by Ad Type
Q1 2913!
Q2 2013!
Q3 2013!
Average!
1.40%!
0.99%!
0.04%!
Domain Ad to External Unpublished Page Post Unpublished Page Post
URL!
(Link)!
(Photo)!
Figure 18: Retail Facebook ROI, by Ad Type
Q1 2013!
Q2 2013!
Q3 2013!
Average!
211%!
98%!
Domain Ad to External
URL!
Unpublished Page Post
(Link)!
79%!
Unpublished Page Post
(Photo)!
* Q3’13 ROI is underrepresented; October revenue has not been fully realized and attributed to September ad spend
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While domain ads to external URLs averaged 0.04% CTR for the first three quarters of
2013, a fraction of the 0.99% and 1.4% CTR averages unpublished page post link and
photo ads, it generated more than double the ROI.
Another trend apparent for retailers is the trend of decreasing ROI for unpublished Page
post ads, with photo versions averaging 61% lower ROI in Q3 than Q1 and link versions
averaging 71% lower ROI in Q3 than Q2. This is likely due to both increasing demand
for News Feed as well as the novelty of the ad units in the first quarters of 2013.
The trend of retailers increasing spend in News Feed is similar with Facebook
Exchange (FBX). Nanigans was one of three companies participating in a Facebook
alpha program enabling remarketing in News Feed with Page post link ads. Since this
launch in May, News Feed has grown from representing 14% of retail FBX spend to
66% in September (see Figure 19).
Figure 19: Retail FBX Budget Allocation, by Delivery Location
100%!
75%!
RHS!
50%!
News Feed!
25%!
0%!
Jan! Feb! Mar! Apr! May! Jun!
Jul!
Aug! Sep!
Retailer CTRs for remarketing campaigns in News Feed averaged 28.3 times higher
than RHS in the first three quarters of 2013 (see Figure 20). The ROI for these delivery
locations is strong and very similar, with retailers averaging 335% ROI on RHS and
386% on News Feed in Q3.
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Figure 20: Retailer FBX CTR and ROI, by Delivery Location
ROI!
386%!
400%!
350%!
CTR!
335%!
1.38%!
1.80%!
1.50%!
300%!
1.20%!
250%!
200%!
0.90%!
150%!
0.60%!
100%!
50%!
0.30%!
0.05%!
0%!
0.00%!
RHS!
News Feed!
Strategy Recommendations
Recommendation #1
Coupling media buying strategies in News Feed and the RHS is core to successful retail
Facebook advertising campaigns. While News Feed delivery offers increased
prominence and larger creative (among other benefits), it is critical to measure post-click
behavior such as purchases to understand the true ROI of these efforts. Through this
lens, the RHS continues to be core to scaling successful campaigns and delivering
strong ROI on Facebook.
Recommendation #2
Performance differs by both delivery location and ad type on Facebook. Retailers should
test multiple strategies to understand what resonates best with their customers, focusing
on downstream metrics like RPC and ROI as opposed to upper funnel metrics like CTR.
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Predictive Lifetime Value
Part V: The Shift from Proxy Metrics to
Lifetime ROI
When examining retail KPIs at the audience level, it is clear that higher funnel metrics
are not proxies for ROI. For example, while male audiences averaged 15% higher CTRs
than female audiences during the first three quarters of 2013, male audiences averaged
26% lower ROI (see Figure 21).
Figure 21: Retail Facebook CTR and ROI, by Gender
0.40%!
175%!
153%!
0.35%!
150%!
0.30%!
113%!
125%!
0.19%!
100%!
0.25%!
0.20%!
ROI!
0.16%!
75%!
0.15%!
CTR!
50%!
0.10%!
25%!
0.05%!
0.00%!
0%!
Female!
Male!
Likewise, while male audiences averaged 9% lower CPCs than female audiences for
the first three quarters of 2013, male audiences averaged 28% lower RPCs (see Figure
22).
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Figure 22: Retail Facebook RPC and CPC, by Gender
RPC!
CPC!
$1.15 !
$0.83 !
$0.40 !
$0.36 !
Female!
Male!
A similar trend is apparent when charting KPIs of traditional age ranges (18-24, 25-34,
35-44, 45-54 and 55-64) – which collectively represent 36% of retailer ad spend in the
first three quarters of 2013 (see Figure 23).
Figure 23: Retail Budget Allocation, by Age Range
13-64! 18-24! 18-64! 25-34! 35-44! 35-64! 45-54! 45-64! 50-64! 55-64! Other!
0%!
10%!
20%!
30%!
40%!
50%!
60%!
70%!
80%!
90%!
100%!
While audiences in lower age brackets averaged 40% higher CTRs than older
audiences, the older age ranges averaged, in some cases, double the ROI (see Figure
24).
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Figure 24: CTR and ROI, by Age Range
ROI!
350%!
CTR!
344%!
0.16%!
286%!
300%!
0.12%!
250%!
250%!
0.09%!
200%!
150%!
132%!
0.10%!
0.09%!
152%!
100%!
50%!
0%!
0.00%!
18-24!
25-34!
35-44!
45-54!
55-64!
Similar trends surface when comparing RPCs and CPCs by age range (see Figure 25).
Figure 25: Retail RPC and CPC, by Age Range
RPC!
CPC!
$1.88 !
$1.92 !
$1.69 !
$1.21 !
$0.32 !
18-24!
$1.26 !
$0.38 !
25-34!
$0.43 !
35-44!
$0.47 !
45-54!
$0.43 !
55-64!
This trend of proxy metrics not being predictive of ROI continues to emerge when
examining KPIs by day of week. Retailers averaged the lowest CTRs on Mondays and
Tuesdays, yet also attributed the greatest revenues on these days (see Figure 26).
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Figure 26: Retail Engagement and Attributed Revenue, by Day of Week
Revenue!
CTR!
0%!
$12 !
0%!
$10 !
0%!
$8 !
0%!
$6 !
0%!
$4 !
0%!
$2 !
0%!
0%!
$- !
Mon!
Tues!
Wed!
Thurs!
Fri!
Sat!
Sun!
Additional inefficiencies and opportunities emerge when charting spend and ROI on a
daily basis. For example, while in aggregate retailers are allocating the bulk of budgets
on Thursdays, they reap the greatest ROI from Saturday through Tuesday (see Figure
27).
Figure 27: Retail Spend and ROI, by Day of Week
Spend!
ROI!
400%!
$5 !
350%!
$4 !
300%!
250%!
$3 !
200%!
$2 !
150%!
100%!
$1 !
50%!
0%!
$- !
Mon!
Tues!
Wed!
Thur!
Fri!
Sat!
Sun!
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Strategy Recommendations
Recommendation #1
Proxy metrics like CTRs and CPCs are not necessarily predictive of return. Retailers
moving beyond optimizing for proxy metrics to lifetime value and lifetime ROI will spend
their media dollars most effectively. (Note: While this report examines ROI on a 30-day
attribution window, retailers measure ROI differently and most leveraging Nanigans
utilize a longer lifetime attribution window.)
Recommendation #2
Retailers should analyze the performance of their Facebook advertising spend on a
daily basis to understand inefficiencies and opportunities.
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Part VI: Key Takeaways for the Holiday Season
152% ROI in 2013, with 3.75X CTR increase from Q3’12 to Q3’13
Retail CMOs should increase Facebook advertising budgets, as the sector has achieved
increasing engagement in the past year and strong, positive return in 2013.
37% increase in CPMs from first to last month of the quarter
Retailers have an opportunity to increase budgets at the beginning of the quarter. Costs rise at
the end of quarter, likely due to heightened demand for inventory at this time as brands and
agencies rush to meet quarterly volume goals.
iOS averaging 17.9X higher ROI than Android
Retailers have a large opportunity on mobile, currently lagging other sectors in their adoption of
Facebook mobile ads. Despite this, the number of retailers tracking revenue from their mobile
ad investments to better understand the quality of customers increased 3X from Q1 to Q3.
Retailers should continue to understand their audience by operating system, with iOS on
average generating significantly greater return.
74% of desktop spend is delivered in News Feed, with RHS
continuing to deliver strong ROI
The fraction of retailer ad spend on desktop delivered to News Feed has increased steadily in
2013, growing from comprising 35% of spend in Q1 to 74% in Q3 – averaging 79% most
recently in September. Adoption of unpublished page post ads in the News Feed grew from
comprising 20% of spend in March to 68% in September. At the same time, through the lens of
ROI, domain ads to external URLs on RHS continue to deliver strong return for retailers,
averaging 211% ROI for 2013.
Proxy metrics like CTR and CPC are not predictive of ROI
Retailers moving beyond optimizing for CTR and low cost metrics like CPC to lifetime value and
lifetime ROI will spend their Facebook advertising dollars most effectively, as showcased by:
• Unpublished Page post link ads average 23X higher CTRs than domain ads, yet average
53% lower ROI
• FBX in News Feed averages 28X higher CTRs than the RHS, yet average 15% lower ROI
• Android averages 2.2X higher CTRs than iOS, yet iOS averages 17.9X higher ROI
• Male audiences average 9% lower CPCs than females, yet average 26% lower ROI
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Appendix: Technology & Team Behind This
Report
Mission, Platform & Value Proposition
•
•
•
Mission: Transforming performance marketing at scale via SaaS for data- and
metrics-driven marketers
Platform: Predictive lifetime value platform for performance marketing at scale
Technology: Measures, predicts and optimizes ad spend for lifetime ROI across
social and mobile
Our Great Customers
•
•
250+ of the world’s largest, data-driven performance marketers
Industry leaders across retail, gaming, travel, lead generation, education,
financial services and more
History & Team
•
•
•
•
•
Founded in 2010 and backed by Avalon Ventures
Designated by Facebook as a Strategic Preferred Marketing Developer (sPMD)
Offices in Boston, New York, San Francisco, London and Singapore
Have delivered 1 trillion ad impressions and 1.75 billion conversion events
120+ employees, including PhD level engineering and data science teams
Ric Calvillo!
Claude Denton!
Marc Grabowski!
Co-Founder and CEO!
Co-Founder and CTO!
COO!
• Formerly Founder/CEO, Incipient, Inc.;
Founder/CEO, Conley Corp. (acq. by EMC)!
• Formerly CTO of CourseAdvisor (acq. by
Washington Post)!
• Formerly VP North America Media Sales,
Yahoo!!
Joe Cuccinelli!
John Marsland!
Scott Ward!
SVP Product!
SVP Growth!
SVP Finance!
• Formerly VP Product, Care.com, Bluefin Labs
(acq. by Twitter), Quattro/iAd (acq. by Apple)!
• Formerly Head of Facebook User Acquisition,
Zynga; Yield Management, CNET!
• Formerly CFO of ad network Chitika!
Ben Tregoe!
Dan Slagen!
Dr. David C. Parkes!
SVP Business Development!
SVP Marketing!
Technical Advisor !
• Formerly Founder/CEO getSugar, Good
Connective and Moeo (acq. by GoldPocket)!
• Formerly Head of Global Marketing
Relations, HubSpot!
• Prof. of Computer Science at Harvard; global
authority on algorithmic economics!
Contact Information
•
•
Direct advertisers: info@nanigans.com
Agencies and trading desks: var@nanigans.com
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•
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