Facebook Marketplace and FBX Gain Huge CPM and ROI Increases on Cyber Monday 2014

Facebook has gone to great lengths to improve the reach, engagement, and targeting of its Ads. Advertising on Facebook has evolved into a complex ecosystem that targets people based on location, device, interest, and network.

A recent study by Kenshoo revealed the huge year-over-year increase of overall Facebook advertising costs in November 2014. As shown in Figure 1 below, normalized CPM jumped 7-fold higher this year compared to November 2013. According to Laura Ruszkowski, Marketing Research Analyst at Kenshoo, the inflation is primarily driven by the “shift in prevalence of right hand side ads to the page post ad format in the Newsfeed.” Also, increase in mobile usage and competition among advertisers for mobile ad views influenced this year’s figures.

Return on investment largely increased as well, experiencing a two-fold year-over-year rise during the same period. The increase in ROI was also influenced by the rise in click-through rates, which went up fivefold year-over-year. Furthermore, “the opportunity to reach a more targeted, tailored audience” resulted in this huge inflation.

While ROI, CTR, and CPM increased in November 2014, results from this year’s Cyber Monday also showed significant movements. CPM and ROI increased significantly in both Facebook Marketplace and Facebook Exchange (FBX). CPM climbed tenfold year-over-year in Facebook Marketplace and tripled year-over-year in FBX on Cyber Monday [See Figure 2].

Moreover, the ROI in both FBX and Marketplace went up fivefold year-over-year in 2014 compared to last year’s Cyber Monday performance.

Ruszkowski suggests that marketers “take advantage of advanced targeting functionality and optimization opportunities” on Facebook’s evolving advertising to gain increased ROI, particularly during the holiday season. She adds:

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.

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