Facebook Advertising ROI

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Facebook Advertising ROI

Key Takeaways

  • The average ROAS (return on advertising spend) from advertising on Facebook is between 6-10x, per a 2020 survey conducted by business analytics platform Databox (link here). Anecdotal research published in 2020 by digital advertising firm NCMborz (link here) corroborates this finding, by stating that Facebook marketing campaigns generate a ROAS between 4-10x.
  • Consistent with these broad, ROAS benchmarks, a 2021 analysis by marketing technology firm Sidecar (link here) found that the average ROAS of "hundreds" of retail Facebook advertisers fluctuated between 7.75x and 14.95x on a monthly basis through 2020.
  • Sidecar similarly reported meaningful variances in Facebook marketers' ROAS by retail industry vertical (between 5.7-17.98x) and each advertiser's level of monthly spending on Facebook campaigns (between 5.53-12.36x).
  • In tandem, digital ad agency Wolfgang Digital's KPI Report 2020 (link here) determined that the ROAS of Facebook advertising campaigns also varies meaningfully by the location/type of advertising placement, with Facebook Feed, Facebook Messenger and Facebook Marketplace delivering average returns of 7.83x, 7.23x and 6.46x, respectively.
  • Meanwhile, the return on Facebook advertising significantly outpaces competing social media platforms, with nearly half (44%) of marketing decision-makers stating that they receive the highest ROAS on Facebook, according to a 2019 survey published by data repository Statista (link here).

Introduction

The research team has identified over 10 statistics that depict the current ROI (return on investment) from advertising on Facebook. Research has been provided in the form of ROAS (return on advertising spend), the more common, industry-specific nomenclature for such data. Additionally, the research team has included available information to help contextualize the return of Facebook ads compared with social media advertising as a whole.

Facebook Advertising ROI

  • The average ROAS for Facebook advertising is between 6-10x, per a 2020 survey conducted by business analytics platform Databox (link here).
  • However, the majority of industry experts report a slightly lower, broader range of returns of between 4-10x, per the same analysis.
  • Anecdotal research published in 2020 by digital advertising firm NCMborz (link here) corroborates these findings, by stating that Facebook marketing campaigns should generate a ROAS between 4-10x, based on the synthesis of historic client data.
  • Consistent with these broad, ROAS benchmarks, a 2021 analysis by marketing technology firm Sidecar (link here) found that the ROAS of "hundreds" of retail Facebook advertisers fluctuated between 7.75x and 14.95x on a monthly basis through 2020.
  • Sidecar similarly reported meaningful variances in Facebook marketers' ROAS by retail industry vertical (between 5.7-17.98x) and each advertiser's level of monthly spending on Facebook campaigns (between 5.53-12.36x), as depicted below.
  • In tandem, digital ad agency Wolfgang Digital's KPI Report 2020 (link here) determined that the ROAS of Facebook advertising campaigns also varies meaningfully by the location/type of advertising placement, with Facebook Feed, Facebook Messenger and Facebook Marketplace delivering average returns of 7.83x, 7.23x and 6.46x, respectively.
  • Meanwhile, a 2020 Facebook analysis in partnership with Kantar (link here) appears to be the only reputable research source that deviates in the reporting of advertising returns through the platform, by publishing a substantially lower ROAS of 1.82 from advertising on Facebook, as highlighted below. However, this study had a limited geographic scope (Indonesia), and therefore may be considered an outlier.

Social Media Advertising ROI

  • The return on Facebook advertising significantly outpaces competing social media platforms, according to a 2019 survey of retail advertising leaders published by data repository Statista (link here).
  • Nearly half (44%) of marketing decision-makers state that they receive the highest ROAS on Facebook, when compared with competing social media platforms. The next closest favored option is Instagram, with 21% of marketers reporting that the Facebook subsidiary delivered the largest return on investment.
  • Corroborating these findings, a 2021 survey by advertising tool Smartly.io and researcher Insights (link here) found that most advertisers worldwide receive the greatest ROAS from placements on Facebook and Instagram, as detailed below.
  • This may be driven in part by the fact that chief marketing officers (80%) as well as advertising agencies (83%) largely report an inability to accurately quantify the return on their social media spending outside of platforms such as Facebook, per the latest research from ad agency MDG Advertising (link here).

Research Strategy

For this research on the current ROI from advertising on Facebook and/or social media in general, the research team leveraged the most reputable resources available in the public domain, including Databox (link here), NCMborz (link here), Sidecar (link here), Wolfgang Digital (link here), Statista (link here), Smartly.io and Insights (link here).

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