The festive season is well underway with marketer promotions in full swing in an effort to grasp the attention of eager shoppers. As expected, retailers are spreading their efforts across multiple channels and devices to pinpoint the most favorable audiences for their products and services.

As Facebook advertising has evolved, it has given marketers the opportunity to do just that – identify and target their highest valued audiences to drive engagement and conversions.

Not only has the Facebook ecosystem shifted but so have marketers’ approaches and programs to reflect the changing environment. By driving efficiencies and optimizations in their paid social programs, marketers have become more sophisticated and their strategies more vigorous, thus increasing overall competition within Facebook advertising and, in turn, upping the worth of Facebook users.

By driving efficiencies and optimizations in their paid social programs, marketers have become more sophisticated and their strategies more vigorous.

When comparing November 2013 to that in 2014, overall Facebook advertising costs rose dramatically. This is largely due to the shift in prevalence of right hand side ads to the page post ad format in the Newsfeed, along with increased mobile usage by consumers and competition by advertisers for mobile adviews. In fact, aggregate average CPM increased by 7X when comparing November 2013 to November 2014.

Facebook Blog Holiday charts2_v3-01

While cost increased significantly, return on investment increased significantly over the period as well, with retailers seeing a return on investment nearly 2X more in 2014. This return, paired with a 5X year-over-year (YoY) increase in click-through rate, and the opportunity to reach a more targeted, tailored audience justifies the increased investment.

These trends were apparent across both Facebook Marketplace and FBX ads, but the growing impact of mobile within the Marketplace environment is worth noting. Although Facebook Marketplace CPM increased by 7X from 2013 to 2014, CTR increased by 5.2X and ROI nearly doubled. Advertisers are going after more Newsfeed placements across devices and honing in on desirable audiences using advanced targeting features like Custom Audiences to generate more engagement than ever before.

While overall performance increases throughout the month of November in 2014 were staggering, the same metrics were even more compelling this year on Cyber Monday. As shown in the chart below, both FBX and Marketplace drove substantial return on investment – 5X greater than ROI on Cyber Monday in 2013. This year, FBX generated greater efficiency than Marketplace with CPM increasing by 3X and 10X respectively, likely due to the changes in Marketplace ads mentioned above.

Facebook Cyber Monday

As Facebook advertising continues to evolve, marketers should take advantage of advanced targeting functionality and optimization opportunities to generate the highest return, especially during the festive season. Leveraging a third-party platform such as Kenshoo will generate even greater efficiencies and scale and improve bidding and optimization accuracy, allowing marketers to focus more strategically throughout the entire shopping season and beyond.

Stay tuned for more festive seasonal insights from Kenshoo back here on the blog and be sure to refer back to The 12 Tips of Christmas as the festive season progresses and your search and social campaigns come to fruition!