Online retailers see high returns from Facebook ad spend by BI Intelligence on Jul 28, 2016, 12:02 PM  This story was delivered to BI Intelligence "E-Commerce Briefing" subscribers. To learn more and subscribe, please click here.
E-commerce merchants saw their average return on ad spend via Facebook grow 75% in Q2, according to a report from Nanigans. The recent report analyzes the return on ad spend for the 20 highest-spending e-commerce and game advertisers utilizing its software over the past year. The growth in return on ad spend can be partially attributed to a 200% increase in ad spend on Facebook during the quarter. This surge in ad spend highlights the extreme value online retailers see in driving sales via the social media platform. Online retailers spent more on advertising on mobile devices than they did on desktop.Approximately 65% of ad spend by e-commerce merchants was committed to mobile devices, while the remaining 35% was allocated to desktop. Facebook’s Dynamic Ads saw 14% growth among online retailers across both mobile and desktop during Q2. Dynamic ads (or retargeted ads) are ads served for products that users have engaged with online or added to their shopping carts. E-commerce merchants are beginning to focus on dynamic ads to boost their social commerce efforts, while moving away from “buy” buttons. “Buy” button services display a product for sale through a merchant (e.g. Amazon, Target) and feature a clickable button that allows users to purchase the item without leaving the social media platform (e.g. Facebook, Twitter). Twitter recently halted the use of “buy” buttons in favor of dynamic ads due to their lackluster performance. And there's been low interest more broadly from social media users in making purchases on these platforms, according to a survey from GlobalWebIndex cited by eMarketer. Just 9% of respondents showed interest in using Facebook's buy buttons. Meanwhile, between 12% and 14% of social media users showed interest in Twitter's, Pinterest's, and Instagram's buy buttons. We expect retailers to continue to shift focus away from “buy” buttons as they look to better leverage the advertising opportunity these social platforms present instead. To receive stories like this one directly to your inbox every morning, sign up for the E-Commerce Briefing newsletter. Click here to learn more about how you can gain risk-free access today.
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