Ad costs on Facebook jump 70% whilst impressions drop 17% YOY

Advertising on Facebook has become 70% more expensive between 2017 and 2018, whilst ad spend on Facebook grew 40% during Q2 2018. Despite the sharp rise in ad expenditure, impressions on Facebook were actually down 17% year-on-year.

That’s according to new data from marketing company Merkle, which recently released its latest Digital Marketing Report.

Effectively, the results show that although marketers are spending more money on Facebook, they are getting less in return. The shift in pricing is partially driven by the increased demand for inventory.

Meanwhile, daughter Instagram saw ad spend shoot up 177% during Q2 compared to Q2 2017. Instagram recently added video advertising to its platform and adoption continues to grow as ever more brands discover the photo app to advertise their products.

Video saw a 209% jump in impressions whilst video views on Instagram were up 80% compared to 2017. Despite the steep increases, Instagram ad rates were lower than Facebook’s in Q2 2018.

When measuring Instagram’s growth relative to Facebook, the photo app accounted for 23% of all ad spend in Q2.

Meanwhile, mobile continues to drive Facebook’s ad revenue with 92% of all clicks now coming from mobile compared to 79% in 2017. Ad spend also jumped to 82% on mobile compared to 74% in 2017.

Interestingly, the report noted that Facebook’s Audience Network only accounted for 1.5% of its ad spend in Q2 2018.

For the remainder of the year, it’s likely that Instagram will continue to see its ad spend climb more significantly than parent Facebook.

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