This document summarizes key advertising trends from a Facebook advertising benchmark report in Q1 2017 according to data from advertising automation software company Nanigans. The main trends discussed are that ecommerce advertisers saw higher returns as ad spending increased, mobile retail advertising grew substantially, investment in dynamic ads increased significantly, and the audience network for off-Facebook inventory continued expanding. The document also provides data on metrics like click-through rate, cost per mille, and cost per click for global campaigns as well as for ecommerce and gaming advertisers.

1. Advertising Automation Software
Q1 2017 Global
Facebook Advertising Benchmark Report

2. Advertising Automation Software
KEY TREND: Ecommerce Advertisers Generate Higher
Returns as They Scale Ad Spending
Across a same-advertiser set of large-scale ecommerce companies
using Nanigans, return on ad spend (ROAS) increased an average of
31% year-over-year in Q1 2017. Growth came from increases in both
click-to-purchase rates and average order value. This came as
advertisers grew Facebook ad spend by an average of 16% - a strong
indication of the continued value of reaching high-value shoppers on
Facebook.

3. Advertising Automation Software
KEY TREND: Online Retail Advertising is More Mobile
Much of the total growth in ecommerce advertiser spending is
attributed to mobile ad budgets, which increased 58% year-over-year
across a same-advertiser set using Nanigans.

4. Advertising Automation Software
KEY TREND: Dynamic Ad Performance Drives Up
Investment
In Q1 2017, Nanigans saw a 33% quarter-over-quarter increase in the
share of ad spend going to dynamic ads, across a same-advertiser set of
ecommerce companies. Year-over-year, growth was even more
substantial at 62%.

5. Advertising Automation Software
KEY TREND: Audience Network Continues to Expand
Facebook has invested in Audience Network to enable advertisers to
extend their campaigns to reach people across a wide range of
websites and apps outside the Facebook ecosystem. Across a same-
advertiser set of companies that enabled Audience Network in Q1 2016
through Q1 2017, the share of ad spend going to off-Facebook
inventory has increased 31% year-over-year.

6. CTR
Click-through Rate

7. Advertising Automation Software
CTR: Global
Average global CTRs on Facebook reached 1.66%, matching the
previous record seen in Q3 2016. The most recent figure represents a
5% quarter-over-quarter increase, and a 33% increase from Q1 2016.
Consistent growth can partly be attributed to continued investment in
highly engaging ad formats such as dynamic ads.

8. Advertising Automation Software
CTR: Ecommerce
Among ecommerce advertisers, CTRs remained essentially unchanged
quarter-over-quarter, only shifting from 1.77% in Q4 2016 to 1.75% in
Q1 2017. CTRs were up 32% on a year-over-year basis. Based on
historical trends, it’s reasonable to expect ecommerce CTRs to also
remain relatively steady through the end of Q2, before rising in the Q3
time frame.

9. Advertising Automation Software
CTR: Gaming
Game advertiser CTRs hit 0.79% in Q1 2017, a slight 9% decrease
quarter-over-quarter and 6% year-over-year. Increased ad spend on
video mobile app install units – which may drive comparatively lower
click engagement, but are historically more effective than non-video
ads at driving app installs – may be a major factor. Gaming CTRs have
stayed notably stable since Q4 2015, remaining close to an average of
0.8%.

10. CPM
Cost per 1,000 Impressions

11. Advertising Automation Software
CPM: Global
At $6.42, global average CPMs dropped 8% quarter-over-quarter, but
remained up year-over-year by 8% - just slightly above the $5.94 CPM
observed in Q1 2016. Over the longer-term, global CPMs have
remained stable over the past year, only surpassing $6.52 during the
typically more competitive Q4 period.

12. Advertising Automation Software
CPM: Ecommerce
Ecommerce advertisers saw Facebook ad CPMs drop to an average of
$5.56 in Q1 2017, a decrease of 23% quarter-over-quarter and 6% year-
over-year. The shorter-term change is a seasonal fluctuation after the
holiday shopping period, while the longer-term trend is indicative of
ecommerce advertisers shifting spend to a wider variety of an units.

13. Advertising Automation Software
CPM: Gaming
CPMs for game advertisers rose by double digit percentages quarter-
over-quarter for the first time since Q3 2015, reaching $5.56. An
important driver of this growth was a 10% increase in the share of
game advertiser spend allocated to video mobile app install formats,
which are generally command higher CPMs than non-video formats.

14. CPC
Cost per Click

15. Advertising Automation Software
CPC: Global
Reflecting quarterly increases in CTRs and decreases in CPMs, global
CPCs declined by 12% in Q1 2017. At $0.39, global Facebook CPCs were
also 19% lower on a year-over-year basis, remaining below the $0.50 to
$0.60 range that was regularly seen throughout 2014 and 2015.

16. Advertising Automation Software
CPC: Ecommerce
Retreating from a holiday season spike, ecommerce advertiser CPCs
averaged $0.32 this quarter, the second-lowest figure behind Q3 2016’s
average of $0.26. The 22% quarter-over-quarter decline largely
matches the 19% and 24% drops seen in Q1 2016 and 2015,
respectively.

17. Advertising Automation Software
CPC: Gaming
The increased shift to video formats pushed game advertiser CPCs to
$0.71, the highest average since Q3 2015. CPCs increased 28% quarter-
over-quarter and 32% year-over-year.

18. Geographic trends
International performance insights

19. Advertising Automation Software
Geographic Trends
The Facebook advertising ecosystem can vary from region to region,
and marketers should always tailor their performance goals and
strategies for each geographic market.
To give advertisers insights on global trends, Nanigans analyzed
campaigns targeted to specific countries in Q1 2017.

20. Advertising Automation Software
Geographic Trends
To ensure statistical significance, country spend, clicks and impressions
data is grouped into geographic regions:
1) The Americas
2) Europe, Middle East, and Africa (EMEA)
3) Asia-Pacific (APAC)
Each region accounts for
tens of millions of dollars
of Facebook ad spend
through Nanigans.

21. Advertising Automation Software
Geographic Trends

22. Advertising Automation Software
About This Report
This report is representative of Facebook® ad impressions delivered by customers leveraging
Nanigans advertising automation software. It includes ad spend on Facebook desktop,
Facebook mobile, and Facebook Audience Network, and excludes Instagram.
The vast majority of Nanigans customers are direct response advertisers at ecommerce,
gaming, and other Internet and mobile companies. In Q1 2017, 96% of spend from these
direct response advertisers was allocated to four Facebook ad products: Unpublished page
post ads, mobile app install ads, domain ads, and dynamic ads.
The majority of these direct response advertisers leverage Nanigans’ ROI based bidding
algorithms, which focus on reaching high-value and high-ROI audiences (e.g. those who
make purchases) and typically cost more to reach. As such, the data in this report may not
necessarily be a proxy for the overall Facebook marketplace.

23. Advertising Automation Software
For more guides, reports and case studies, visit nanigans.com