February 14, 2012
Brands are continuing to invest in Facebook advertising and focusing on fan acquisition.
Spend in social media advertising is now additive to existing budgets rather than subtracting from other digital media channels, demonstrating the growing investment in the medium.
Brands continued to acquire Facebook fans at 9 percent
per month. Facebook spend share reached 2.7
percent of biddable online advertising spend in Q4
2011 and is expected to increase fan base by 2x by the
end of 2012.
Search spend increased significantly in Q4 of 2011,
bolstered by aggressive spending by retailers. Overall,
search spend grew 14 percent Year over Year (YoY)
in the United States, while retail specifically grew by
18 percent YoY and 40 percent Quarter over Quarter
(QoQ), indicating that search is still the primary driver
of digital marketing spend.
While Q4 search spend increased significantly,
Cost Per Clicks (CPCs) decreased 5 percent due to a
rise in mobile advertising, where clicks are less expensive.
Meanwhile, improvements in more efficient ad
delivery by search engines resulted in higher click-through
rates, and mobile spendbecame 7-8 percent of
search spend compared to 2 percent a year ago. This
is according to Efficient Frontier, a performance marketing
company.
“- Facebook continues to be where marketers are placing new bets by adding advertising spend with a focus on fan acquisition,” said Bonny Trolle, Business Developer, Interactive Solutions. “- Mobile search advertising is also an area of significant investment, growing to 7-8 percent from 2 percent a year ago. We should expect both channels to grow significantly in 2012.”
Additional report highlights:
• Google maintains 80 percent spend share in Q4.
Yahoo/Bing clicks yielded 14 percent more revenue
per click (RPC) than Google while also having 9 percent
more Return on Investment (ROI) than Google.
Yet Google increased click share by 2.5 percent YoY
indicating the necessity for volume and reach from
advertisers, primarily retailers, in Q4.
• Mobile spend specifically tablets, is becoming increasingly
important for marketers as tablets account
for 50 percent of mobile search spend and 50 percent
of click share.
• Display spend remains flat QoQ. However,
Google’s Doubleclick increases exchange display market
share by 19 percent YoY. Due to both inventory
constraints and shifting strategies by Yahoo for their Right Media Exchange, Google extended significant share gains in biddable display.
• European markets showed strong growth in
search spend YoY. France increased search spend 70
percent YoY and Germany 47 percent YoY indicating
heavier investments into online advertising in 2011.
The UK has been leading the online marketing industry
in Europe and continues to increase search spend
19 percent YoY.
Outlook for Q1 2012:
• Facebook spend will reach 5 percent of all online
advertising spend by the end of 2012. As marketers
improve their ability to acquire and engage Facebook
fans, brands will continue to pump incremental
spend into Facebook.
• Mobile search spend will make up 16-22 percent
of all paid clicks by the end of 2012. As more mobile
devices with full Internet browsing capabilities enter
the market, mobile experiences become more robust.
This is driving a shift of consumer usage from
desktops to mobile devices, ultimately causing mobile
advertising to become a key focus for marketers
in 2012.
• Search spend will increase 15-20 percent in 2012
in the United States. Similar growth is expected internationally,
however, the macro economic conditions
in Europe may significantly affect this growth.
• Search CPCS will further decrease by 4 percent.
The increase of mobile advertising and mobile search
spend will contribute to this reduction. Search engine
innovations by Google to provide more effective ad
delivery will also continue to decrease CPCs.
• Yahoo/Bing will continue to pursue more ad inventory.
Although Yahoo/Bing clicks continue to have
better RPC (Return-Per-Click) and ROI, the search
engine still needs to increase reach to improve market
share. Advertisers are eager to take full advantage
of the higher performance Yahoo/Bing provides, but are still looking to do so at scale.
• Development in other social platforms such as
Google+ and LinkedIn will have a positive impact on
social spend and the growth of this competitive space.
However, Facebook will still remain the dominant
social network and social publishers for advertisers in
2012.
This analysis was completed based on data from Efficient
Frontier search engine marketing customers
and the resulting Efficient Frontier Customer Index.
The Efficient Frontier Customer Index represents a
subset of Efficient Frontier clients who have spend
data for six consecutive quarters or more whose resulting
SEM metrics are then normalized to average
industry category contributions established by multiple
third party data providers. The Efficient Frontier
Customer Index consists of a fixed sample of large
scale U.S. search engine advertisers across multiple
sectors, including finance, travel, retail and automotive.
The Efficient Frontier Customer Index sheds light
on trends in search engine spending and performance
on a year-over-year (YoY) and quarter-over-quarter
(QoQ) basis.
The analysis of Facebook performance was based
on data from both the Efficient Frontier and Context
Optional platforms. A client index representing over
15 advertisers and 20 million fans from a multitude
of verticals including retail, entertainment, CPG and
Finance was built from a subset of advertisers, brands
and fans managed through the platforms. Advertiser
and user behavior was then analyzed for three quarters
beginning Q4 2010.