FACEBOOK ADVERTISING HOLIDAY TREND PREVIEW

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1 2015 FACEBOOK ADVERTISING HOLIDAY TREND PREVIEW FOR ECOMMERCE With an estimated 23% of total U.S. retail ecommerce sales occurring during November and December of last year, it s critical for advertisers to understand purchase behavior in order to effectively capitalize on the holiday opportunity. Through an analysis of 2014 ecommerce Facebook advertising data, this report will answer the top four advertising questions going into the 2015 holiday season: How does shopper purchase behavior change during the holidays? By day of week By time of day By gender How and when does the cost of driving purchases change? How does ad engagement change? How does ad spend shift? Key Findings 71% increase in same-day purchase rates during the holidays 19 increase in ad engagement (CTR) during the holidays 14 increase in mobile share of purchases during the holidays Nanigans Advertising Automation 1

2 1 How does shopper purchase behavior change during the holidays? DAY OF WEEK Purchase rates, by day During the holidays in 2014, overall purchase rates for ecommerce advertisers increased by roughly 2X on Facebook. From January through the end of October 2014, purchase rates on Facebook reached their peak on Thursdays. However, during the holidays purchase rates were highest on the weekend. As seen in the second graph, the share of weekly purchases segmented by each day of the week was nearly inverted between the holidays versus the rest of the year. 2X increase Sun Mon Tue Wed Thu Fri Sat Weekends are peak purchasing days during the holidays, as opposed to Thursdays during the rest of the year. 18% Weekly purchase share, by day Don t discount the weekends during the holiday shopping season. Consider restructuring your bidding and budget allocation to be weighted more heavily toward weekends to capitalize on increased purchase activity. 15% 12% 9% 6% 3% Sun Mon Tue Wed Thu Fri Sat Nanigans Advertising Automation 2

3 1 How does shopper purchase behavior change during the holidays? TIME OF DAY Throughout the year, shoppers tend to make more ecommerce purchases through Facebook ads on desktop than on mobile. Throughout 2014, shoppers tended to make more ecommerce purchases through Facebook ads on desktop than on mobile. However, behavior did change during the holidays. In the 2014 holiday season, the share of ecommerce purchases made on mobile increased 14 to 36% of total purchases. While customers demonstrated higher purchase rates in general during the holiday season, what did not show a great degree of seasonal change were the hours when customers purchased. Both during the holidays and the rest of 2014, the hours between 9 and 11a.m. ET were the most active for ecommerce advertisers in terms of average daily purchase activity. The holiday season saw a slightly higher share of purchases occurring in the early afternoon hours, but it was not dramatically different from the non-holiday period. Non-holiday purchase composition, by hour Desktop/Mobile Share of Hourly Purchases a.m. 6 a.m. 12 p.m. 6 p.m. 11 p.m. purchase composition, by hour 10 Desktop Share Mobile Share Hourly Share of Total 12% 6% 12% Hourly Share of Total Daily Purchases 14 increase in share of purchases on mobile during the holidays compared to the rest of the year. Desktop/Mobile Share of Hourly Purchases 5 6% Hourly Share of Total Daily Purchases The holiday season is the best time to drive purchases on mobile, but don t neglect desktop. At the hours when shoppers purchase the most, those users still generate over twothirds of purchases. 12 a.m. 6 a.m. 12 p.m. 6 p.m. 11 p.m. Desktop Share Mobile Share Hourly Share of Total Nanigans Advertising Automation 3

4 1 How does shopper purchase behavior change during the holidays? GENDER Mobile purchase rates, by gender It s no surprise that global purchase rates from Facebook ads increase during the holidays, as more online shoppers buy gifts for family and friends. Outside the holidays, both males and females demonstrated similar purchase behavior across desktop and mobile, with desktop purchase rates slightly higher for both genders. +64% +117% During the 2014 holiday season, purchase behavior changed significantly. Purchase rates increased most on desktop, and the single largest seasonal increase was from males on desktop, with a 233% increase when the holidays came around. Female Male 233% increase in desktop purchase rates among males during the holidays compared to the rest of the year. Desktop purchase rates, by gender +182% +233% While it can be more expensive, don t be afraid to increase your spend during the holidays. All genders see dramatic increases in purchase rates, particularly on desktop, increasing potential ROI. Female Male Nanigans Advertising Automation 4

5 2 How and when does the cost of driving purchases change during the holidays? When is the most cost effective time to drive ecommerce purchases using Facebook ads? The answer is noticeably different during, and outside of the holidays. Ecommerce advertisers achieved more purchases for every ad dollar spent during the holidays as opposed to during the rest of the year, regardless of the hour of the day. Compared to desktop, mobile ads delivered, on average, slightly more purchases for an advertiser s buck during the holidays. Why did this occur? Facebook mobile advertising costs on a per-impression basis did not change significantly during the 2014 holiday season. CPMs for ads targeting female mobile shoppers increased a modest 8%, but costs for reaching males remained virtually the same. For advertisers targeting desktop shoppers, however, costs increased substantially. CPMs for ads to female customers skyrocketed 236% over non-holiday costs. Increased marketplace competition also drove costs to reach male shoppers on desktop up 125% during the holidays. While dramatic, keep in mind that the reduction of desktop right-hand side ad inventory during the middle of 2014 also contributed the CPM increase. Number of mobile purchases per ad dollar, by hour Peak desktop purchases (shown for comparison) 12 a.m. 6 a.m. 12 p.m. 6 p.m. 11 p.m. Number of desktop purchases per ad dollar, by hour Peak mobile purchases (shown for comparison) 12 a.m. 6 a.m. 12 p.m. 6 p.m. 11 p.m. 11 a.m. on weekends is when marketers targeting customers on mobile or desktop get the most purchases for their ad spend during the holidays. Don t discount mobile this holiday shopping season. In 2014, prices remained relatively stable on mobile, while purchase rates rose fairly significantly. Cost per 1,000 impressions (CPM) $4.48 Mobile Male $4.45 $5.64 Mobile Female $5.23 $3.44 Desktop Male $1.53 $4.03 Desktop Female $1.20 $0 $2 $4 $6 Nanigans Advertising Automation 5

6 3 How does ad engagement change during the holidays? As many ecommerce marketers ramped up ad spend during last holiday season, click-through-rates (CTRs) of Facebook ecommerce ads in 2014 either held steady or increased over the same period. Desktop click-through rates (CTR) Ad engagement rates rose most substantially on desktop, with CTRs for females doubling during the holidays, while males exhibited a 33% increase. On mobile, males and females on Facebook clicked on ads at virtually the same rate during the holidays as they did during the rest of the year. 0.2% 0.3% 0.4% 0.4% 2X higher CTR on desktop among females during the holidays vs. the rest of the year. Female Male Mobile click-through rates (CTR) While CTRs are key indicators of relevance in ad placement, optimizing for downstream behavior such as purchases and ROI are key to ensuring you reach high value shoppers who may cost more to reach but also purchase more. 1.5% 1.4% 1.5% 1.4% Female Male Nanigans Advertising Automation 6

7 4 How does ad spend shift during the holidays? Customer behavior often changes during the holidays, with people traveling more to be with family and friends. As a result, advertisers may shift spend to reach their customers where they are more likely to be: on the go. ad spend by device In the 2014 holiday season, the share of Facebook ad spend targeted to mobile devices jumped more than 2X as compared to the first 10 months of the year. Although mobile s share of ecommerce ad spend increased over November and December, desktop still commanded a significant majority of the total, at 67% of holiday ad spend. 67% 33% Desktop Mobile Desktop ads have historically driven a greater share of total ecommerce purchases, so its continued dominance during the holidays reflects the fact that advertisers still see desktop as their biggest potential revenue driver, even with the changes in user behavior during the holidays. Non-holiday ad spend by device 18% more ad spend was allocated to mobile during the 2014 holidays vs. the rest of the year. 15% Desktop Mobile 85% While ecommerce advertiser demand for desktop inventory is substantial during the holidays, higher purchase rates can easily offset the cost increases. Nanigans Advertising Automation 7

8 2015 Facebook Advertising Trend Preview for Ecommerce CONCLUSION For online retailers, the holidays are when shoppers are in prime purchasing mode, making the competition to reach and convert them especially intense. While advertising costs do increase, a look back at 2014 underscores the fact that Facebook holiday advertising is still well worth the investment, and advertisers have an unparalleled opportunity to drive more purchases and revenue at scale. About this Report To conduct this study, Nanigans analyzed Facebook ad spend, clicks, and impressions of ecommerce advertisers using Nanigans software from January 1 through December 31, Purchase-related metrics were calculated by aggregating purchase data across sampled ecommerce advertisers who have same-day purchase attribution. As a note, the holiday season was defined as the time period ranging from November 1 through December 31, In total, the sample consisted of hundreds of millions of dollars in Facebook ad spend. 2015, Nanigans. All Rights Reserved. Take control of your digital advertising with the software powering today s most successful in-house performance marketing teams. Contact Us

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