Spend on social advertising jumped 50% year on year (YoY) in the last quarter of 2015, stimulated by new Facebook ad types, changes in bidding strategies and the wider availability of Instagram ads, according to new research. These findings, from Kenshoo, suggests that spend on search advertising grew by 8%, driven in part by growth [...]

Spend on social advertising jumped 50% year on year (YoY) in the last quarter of 2015, stimulated by new Facebook ad types, changes in bidding strategies and the wider availability of Instagram ads, according to new research.


These findings, from Kenshoo, suggests that spend on search advertising grew by 8%, driven in part by growth in retailers’ use of product-focused seasonal Product Listing Ads (PLAs), which made up 26% of all search impressions (up from 8% a year ago).
Mobile continues to be the biggest driver of overall growth in both channels, accounting for nearly all of the annual spending increase in paid search.
The data is presented in a new infographic, Kenshoo Digital Marketing Snapshot: Q4 2015, highlighting key quarterly global metrics and benchmarks for social advertising and paid search based on more than 550 billion impressions, 11 billion clicks and $6 billion (USD) in advertiser spend through the Kenshoo Infinity Suite.
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In paid social, a number of factors - combined with the seasonal rush by retail marketers - are likely to have helped drive up ad spend:
● The increasing adoption of new ad types such as Facebook Dynamic Product Ads a direct response ad type that helps businesses promote multiple products or their entire product catalogue.
● Changes in social advertising bidding strategies driven by Facebook changing the definition of Cost-per-Click (CPC) to make it easier for marketers to bid on offsite clicks (taking them to an advertiser’s landing page or app) rather than social engagement clicks (likes, comments, shares, video views etc.). Facebook also introduced changes designed to make bidding and optimisation processes simpler.
● Instagram making it possible for marketers of all sizes globally to begin buying and managing Instagram ads on a self-service basis.
While there were fewer impressions for social ads in the quarter, the Click-through-Rate (CTR) went up by 64% YoY meaning there were 30% more clicks. With marketers valuing those clicks more highly, CPC went up 10% compared with the previous year.
Rob Coyne, Kenshoo’s Managing Director for EMEA, said: “The many changes during the year in social ad types, how they are bought and how customers engage with them – together with the opportunity to buy Instagram advertising – have all had an impact on spend and performance in the busy last quarter. They have helped to make social clicks more valuable and disrupted previous trends in both CPC and CTR, with the greater competition among retailers during the holiday shopping season likely to have exacerbated the effects. In search – as with social – there was a notable focus on more direct product-focused advertising with Product Listing Ads seeing a lot of interest from marketers.”
In paid search, clicks on ads grew 32% YOY with impressions up 11% as marketers invested in mobile ads which boast a higher CTR. While spend increased by 8%, the overall CPC of search ads was driven lower (-19% YoY) because marketers were more focused on lower-priced mobile search ads and PLAs.
Methodology
Search and social results are based on five quarters of performance data from over 3,000 Kenshoo advertiser and agency accounts across 20 vertical industries and over 60 countries, spanning Google, Bing, Baidu, Yahoo!, Yahoo! Japan and the Facebook® Audience Network. Some outliers have been excluded. The resulting sample includes more than 550 billion impressions, 11 billion clicks and $6 billion (USD) in advertiser spend.
Ad spending and CPC are measured using Ex-FX or “Constant Currency” adjustments, where results are based on native currency, and only translated to common currency after aggregation.
Source: www.Kenshoo.com