The ROI of Facebook Ads

Posted on by Zach Billings
Categories: Facebook

Traditionally, it has been hard to track the ROI of social media, but Facebook has been making things a lot more quantifiable. Advertisers have been doing research, and now we have some hard numbers to share with you, courtesy of the new report released by Nanigans. Let’s take a look at Facebook’s ROI and what it means for your social media marketing.

After an analysis of over 100 retailers and more than 150 billion Facebook impressions, the study found that advertisers are seeing a click through rate of over .20 percent. This may not seem like much, but it’s up 3.75 times the click through rate of 2012, and these retailers are averaging a 152 percent return on investment for their Facebook ads. It’s not astronomical, but it’s profitable, and what else can you ask for really?

“Incremental sales have become core to retailer Facebook advertising goals, and measuring the true ROI of these efforts is being increasingly demanded,” Nanigans COO Marc Grabowski said in a statement. “While every retailer has a unique customer base and their results and strategies vary, we’re excited to offer a benchmark report specific to the sector with meaningful metrics and actionable strategy recommendations.”

It’s worth noting that the ads that are doing well are the ads in the right column sidebar. Ads within the feed itself had a click through rate that was 28 times higher than the sidebar, but strangely, their ROI was 15 percent lower. Our best guess is that people are clicking ads in the newsfeed not necessarily realizing that they’re ads, so they have no interest in buying anything. With the sidebar ads, people know they are clicking an advertisement, so they are more likely to buy, thus leading to a higher ROI.

What has your experience with Facebook ads been? Let us know how you’re faring!

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