Facebook Inc (FB) Earnings Results To Get Boost From Video Ads

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Facebook Inc is scheduled to release its first quarter earnings results next week, and analysts have long been touting video ads as a source of strong future growth. Now we’re seeing data that backs up these views and seems to promise significant growth in the future.

Facebook (FB) video ads offer greater ROI

Advertising automation software firm Nanigans released its quarterly “Global Facebook Advertising Benchmark Report” this morning. The firm said marketers using its software are spending more and more on video ads on the social network, especially mobile video ads. According to their latest report, North American marketers spent 26% more on mobile video ads in the first quarter compared to the previous quarter.

The increase among marketers in the Asia Pacific region was even greater, and the overall mobile ad spend share being allocated to video increased in all major verticals. Gaming saw the biggest quarter over quarter increase, said Nanigans, and they were rewarded for being early adopters. Their returns on mobile app install ads grew, and over 35% of their total ad spend was on video ads, representing a 122% year over year increase.


Retailers receive a boost from Facebook (FB) ads

Nanigans also reports that even though cost per impression has been steadily rising for retailers over the last year, its biggest retail clients continue to see higher returns on their investments. The firm attributes this increase in ROI from greater adoption of Facebook’s Inc (NASDAQ:FB) Carousel and Dynamic Product Ads as since last year’s first quarter, it saw a 57% increase in return on ad spend. Also same-advertiser purchase rates skyrocketed 171%, while average order value climbed 17% year over year.

E-commerce advertisers are also spending a greater chunk of their budgets on mobile ads with more than 60% of their spend on Facebook Inc (NASDAQ:FB) going to mobile.


Click-through rates on Facebook still rising

Nanigans also found that global click-through rates on Facebook Inc (NASDAQ:FB) are still rising even though they’re coming off a solid base. The first quarter marked the eighth in a row in which click-through rates moved higher, and they reached a new record high since the firm started putting together its quarterly benchmark reports in the third quarter of 2013.


E-commerce marketers saw a 24% increase in click-through rates in the first quarter, which was the biggest increase for the segment since the third quarter of 2014. Their rate reached 1.32%. The gaming vertical saw click-through rates edge higher by 4% sequentially and 29% year over year to 0.84%, a record high for the vertical, which Nanigans attributes to international growth and video and Carousel mobile app install ads.

Overall cost per impression on Facebook fell

While retailers saw their cost per impression climb in the first quarter, overall CPM declined 7% sequentially to $5.94. Nanigans noted a long-term deceleration in increases as CPMs climbed 29% year over year, which was the lowest growth rate since the firm started its benchmark reporting. Cost per click declined 16% sequentially and 10% year over year to 48 cents.

Facebook Inc (NASDAQ:FB) shares edged higher by 0.58% to $112.94 in morning trades.

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