Global social ad spend doubled at the end of 2015 thanks to Facebook’s improved ad offering

Changes to Facebook’s CPC strategy and improvements to its ad products coupled with the wider availability of Instagram ads mean social ad spend growth is overtaking search at a significant rate

Spend on social advertising grew by 50 per cent year-on-year during the final quarter of 2015 as more marketers flocked to social networks such as Facebook and Instagram to target customers. The channel’s growth rate was six times that of search marketing which noted an expenditure increase of just eight per cent, according to new research.

Mobile was found to be the biggest driver of overall growth across both channels, accounting for almost all of the annual ad spend increase in paid search.

The findings were outlined in Kenshoo’s most recent Digital Marketing Snapshot study, which analysed 550bn ad impressions on leading digital media assets such as search engines and social networks, including Google, Facebook and Twitter.

Scaled up social

Continuing the trend set in Q2 of last year, advertisers are willing to spend more on social, which the report puts down to adjustments made to Facebook’s ad platform and greater access to Instagram ads combined with the festive rush from retail marketers.

In the last half of 2015, Facebook pushed hard to roll out its ad tech business Atlas and reviewed its cost-per-click (CPC) charges – moving from a model which measured campaigns based on likes, shares and comments, to one that focused on clicks through to website and apps.

The social giant implemented the move in a bid to provide transparency and “help advertisers better understand how their ads perform against their objective.”

The changes have clearly convinced marketers to up their social spend and clicks on social campaigns increased by 30 per cent compared to the same period in 2014; reflecting the increase of ads posted on the channel.

Social frog-leaping search could also be down to the increasing adoption of new features such as Facebook’s recently introduced Dynamic product ads, which allow brands to promote multiple goods to targeted audiences.

Also notable is that ahead of the final quarter of 2015, Instagram opened itself up to all advertisers. The image-sharing app moved over to Facebook’s buying interface, making it easier for brands to invest in the platform.

Rob Coyne, Kenshoo’s managing director, EMEA, said: “The many changes during the year in social ad types, how they are bought and how customers engage with them – together with the opportunity to buy Instagram advertising – have all had an impact on spend and performance in the busy last quarter.”

Product-focused search

Although social spend eclipsed that of search, the latter still achieved a small degree of success which the analysis puts down to retailers' use of product-focused seasonal ad listings (PLAs).

PLAs made up 26 per cent of all search impressions in Q4 of 2015, up eight per cent on the previous 12 months.

Search’s progress was hindered by the overall cost of CPC ads decreasing by 19 per cent during the time period as marketers looked to purchase lower-priced mobile search ads because of their high click-through rate.

So far 2016 looks to be a challenging year for search, just last week eMarketer predicted that US digital display ad spend is expected to surpass search expenditure for the first time. The forecast stated that video, sponsorships, rich media and ‘banners and other’ will account for 47.9 per cent of spending this year.