5 Year Look Back – Facebook Ad Campaigns
We decided to look back on several of our Facebook campaigns focusing specifically on the western Canadian market and share some of the learnings and insights that we work within on a day-to-day basis. The following is a look back over 5 years, where we have analyzed over half a billion ad impressions and roughly 2.7 million dollars of advertising spend.
While Facebook’s advertising ecosystem (Facebook, Instagram, Messenger, Audience Network) accounts for less than 5% of our client’s annual advertising spend, over the past 5 years it’s the platform our clients are most curious about and where the majority of the questions of our post-campaign results lie. As with most digital advertising platforms, the way we can buy and optimize our campaigns is always changing, and to some degree limitless. Every advertisers’ results will vary depending on variables like; ad spend, demographic targeting, interest targeting, creative type (static vs. video), creative engagement, etc.
To set the stage for these graphs and charts, the vast majority of these campaigns we pulled from had the following as norms:
- Optimized towards one of the following: Reach & Frequency, Brand Awareness, Video Views
- Campaigns were targeted at a provincial or regional level
- Campaigns had a broad target audience A18-44, A18-64, etc.
- No Campaign utilized Audience Network as a placement (although Facebook has made efforts to enhance the quality of this inventory, we still see it below the minimum threshold of media standards we like to apply to our client’s digital buys).
As every client brief is different there is no way for us to establish a true apple to apple comparison. Digital advertising is in a state of flux where competition and platform adoption constantly add layers of variables to the outcomes.
Most of our clients are brand focused and as such we are often optimizing towards KPIs that align with brand metrics, as opposed to metrics that focus more on the bottom of a traditional advertising funnel. Some of the questions we often get asked are “how many clicks did the ad get?” “which piece of creative had the best CTR?” – As other digital studies have shown CTR has very little if any correlation with campaign success. Better yet, Facebook stated so in their own study(in partnership with Nielsen) back in 2015, half a decade later, and we are still talking about it:
We saw the above really shine through on a recent campaign where a client was working a different agency in 2019, and DSA in 2020, the previous agency focused on low CPM, high CTR placements which resulted in a significant increase in website traffic, some sales, and a low conversion rate. When compared with our recent campaign we focused on higher-quality digital media placements focused on the right audience, as opposed to click-heavy online users, and saw the following results: 46.82% decrease in website traffic, 63.87% increase in sales, and a 208.47% increase in conversion rate. Not all website traffic is quality traffic, as great as it is to see some of our metrics increase, we must always work back to the actual business objective, not proxy KPIs that feel good.
While CPM isn’t a great metric to measure business success on, it does allow us to set standards and evaluate the value of the media we’re planning and buying, the lower the CPM the more inventory we’re able to purchase, and the higher the CPM the less inventory we’re able to purchase. However, a CPM price doesn’t always equate to good or bad quality, we also need to look at options such as creative impact, reach, brand safety, ad fraud, viewability, measurability, etc. Quite frankly it’s extremely easy to buy low CPM, low-quality inventory, but get a lot of it – unfortunately, it’s where we see a lot of advertisers spend their digital dollars. It’s also extremely common to see advertisers spend the majority of their ad budgets on extremely high-impact, high CPM placements that reach less than 10% of their target audience. At DSA Media we constantly try to find a balance of good value inventory, with great quality inventory that allows the creative and brand to shine.
Average CPM by Month
While we often speak to later in Q4 being the most expensive time to advertise in digital, we do see other periods through the year which have peaks and valleys in CPM costs.
Average. CPM YoY
From 2016 – to early 2018 we saw the average CPM prices on the Facebook Ad Platform rise, and over the past 24 months, we have seen the prices significantly decrease. 2020 is a bit of an outlier in the data as COVID-19 shifted advertising budgets in many different directions. However, even in our pre-covid world, we were seeing the CPM prices decrease – this could be the advertising market correct slightly from the over-excitement of the new shiny digital thing many brands and marketers were so excited to take advantage of, or this could be Facebook’s attempt at attracting more ad dollars from brands who were seeing lower CPMs on other social platforms like Snapchat, TikTok, Pinterest, etc.
Like with other forms of media, not all buys are created equal, even as we dive in at a provincial level, we see massive changes in CPM value from British Columbia to Saskatchewan. For us being able to plan the correct level of investment in terms of media dollars into a channel across various markets enables us to be efficient with our planning, while opening up the doors to new channels as we can determine we’re not over-investing into Facebook.
Now again depending on campaign goals, we need to account for the nuances of the individual platform and device type to ensure we’re effectively reaching the target audience, while also understanding the contrasts of any given market that the campaign will be running in.
Platform Reach YoY
As mentioned before, Facebook accounts for only a portion of most of our client’s overall media spending but it’s also important for us to look at their consumption habits across both Facebook and Instagram mixed into the Canadian digital media usage numbers:
The reach in the following charts isn’t an indication of Facebook or Instagram’s total available audience, it’s a look at how some of our clients in these specific markets reached their audience over those particular periods, although Instagram did significantly increase its audiences footprint from 2016 to 2020. Although these campaigns were primarily brand-focused, I like to dive into a platform’s reach or user adoption as I have found over time that more mature digital platforms typically result in stronger performance KPIs around purchases or leads. I attribute this to user familiarity and platform trust. If a person has been using Facebook for 10 years and Instagram for 3 years, that person may feel more confident in entering their contact info or completing a purchase from a platform they are more accustomed to.
While all of this is fascinating to someone like me, who works with this type of data on a day-to-day basis, the ultimate goal is for us to use these and other learnings to stretch our client’s media budgets further. We help them punch above their weight across extremely competitive verticals where competitors often have larger budgets. When we look beyond just Facebook & Instagram and apply strategic media planning and buying across an advertiser’s entire media budget the savings or reinvestment back into other marketing or business channels can be exponential.