Dive Brief:
- Facebook's advertising revenues grew 62% in Q1 2018 versus the same quarter last year, per the 4C's "The State of Media" report and as referenced by MediaPost. However, there was a decline of 34% from Facebook's Q4 2017 ad revenue, which may likely reflect seasonal advertiser demand.
- Among other social media platforms, Snapchat saw the largest ad revenue increase at 234%, followed by Facebook-owned Instagram with 136%. LinkedIn's ad revenue grew 66% and Pinterest's 41%.
- LinkedIn had the most expensive CPM at $16.99, followed by Facebook at $5.12. Instagram's CPM was $4.20, Pinterest was $3.20 and Snapchat's was $2.95. Facebook had a click-through rate of 1%. Pinterest's CTR was 0.48%; Snapchat's was 0.37%; LinkedIn's was 0.25% and Instagram's was 0.17%.
Dive Insight:
Based on 4C's report, Facebook seems to be holding up amid fallout surrounding the Cambridge Analytica scandal, which resulted in a privacy breach of the personal data of 87 million users. Even with the #DeleteFacebook boycott push, it seems like many advertisers are staying put, while possibly keeping a close eye on the latest developments in the controversy. Some advertisers, including Mozilla, SpaceX, Tesla and Sonos, have announced plans to delete their company Facebook pages or pull ads from the platform since the scandal broke.
The strong performance for Snapchat in Q1, albeit off a much smaller base than Facebook, suggests that platform isn't suffering either despite recent high-profile defections that caused parent company Snap Inc.'s stock value to temporarily drop. The platform at the beginning of the year also unveiled a redesign that wasn't embraced by all. As Snapchat continues to beef up its ad-related offerings, including m-commerce, and simplifies the process for placing ads, some brands are clearly jumping at the opportunity to reach its highly engaged younger audience.
Facebook remains a good deal for advertisers despite all the controversy, according to MediaPost. Its current CPM of $5.12 and 1% click-through rate shows that its cost-per-click (CPC) of 48 cents is the most efficient compared to the other social media platforms analyzed. Pinterest was its next closest competitor with a CPC of 67 cents, and Snapchat with 81 cents. LinkedIn had the highest CPC of $6.72 followed by Instagram at $2.52.
Facebook has only publicly hinted at how advertisers are responding to the Cambridge Analytica controversy. The company's COO Sheryl Sandberg said that some advertisers have paused spending, while CEO Mark Zuckerberg said that there has been no "meaningful impact" in terms of brands or users leaving the platform.
The company seems to also be faring well among users. Only 8% of users reported plans to stop using Facebook following news of the data breach, according to a survey by securities firm Raymond James. However, 45% said they would use the platform less, and more than 70% expressed concern over the issue.
