To put Meta’s advertising stranglehold into perspective, Twitter’s ad revenue in 2021 was just over $5b, while Snapchat’s was a touch over $3b. 

With the exception of TikTok, which could generate $12b in ad revenue by 2026, it’s hard to imagine Meta relinquishing control of the lion’s share of social advertising budgets. 

Still, advertisers remain at a crossroads when deciding where their ad dollars should go inside Meta’s walls. 

Should they go with Facebook, the undisputed leader in social advertising?

How about getting in front of Millennials and Generation Z on Instagram?

Do they blaze their own trail and get the best of both worlds?

Here’s how advertisers spent on Facebook and Instagram through August 2022.

In Facebook We Trust

The numbers make it clear that Facebook is still on a pedestal.   

Through August, 48k of the 64k companies—that’s 72% of them—only bought Facebook ads. (For comparison, 10% of advertisers only bought Instagram ads, while 18% bought a mix of both.) 

The number of Facebook-only advertisers doesn’t tell the entire story, but it does show that Facebook still reigns supreme. 

In an evolving social world, Instagram has the upper hand given its popularity with younger generations—70% of 12-to-34-year-olds use it.

But with nearly 3b monthly active users (MAUs) and the most mature ad tools available, many advertisers still trust Facebook.

Despite this, Meta appears to be seeing the writing on the wall—that the future is with other platforms, namely, Instagram and TikTok. 

Proof of that is Meta’s announcement that ads are coming to Facebook Reels; Reels, of course, being Meta’s response to TikTok. 

Not only that, but the announcement said that creators would get a share of the ad revenue. 

This development perfectly illustrates Meta’s go-to-market strategy: Introduce features that appeal to younger generations, give advertisers access to this inventory and open the door to the growing creator community.  

As Meta looks to reestablish Facebook, especially with Millennials and Generation Z, innovation will continue to flow—and that’s great news for everyone involved, including advertisers. 

Facebook & Instagram Are Safe Havens for SMBs

As big as Facebook and Instagram are—they have about 2.9b and 1.2b monthly active users (MAUs), respectively—they aren’t abandoning small-to-medium businesses (SMBs).

In fact, their commitment to SMBs is stronger than ever—a welcome fact for the nearly 57k companies that spent less than $1mm on Facebook and Instagram. 

• In June, Meta introduced the Meta Pro Team—an expansion of Facebook Marketing Experts that provides complimentary live support to businesses.

• In July, it launched Small Business Studios, a virtual and in-person initiative to support SMBs, including an online training hub and workshops.

• Finally, in early October, Meta rolled out Pages to make it easier for small businesses to connect with their customers.

Combine this constant innovation aimed at SMBs with mature yet easy-to-use ad tools, and both Facebook and Instagram will remain safe havens for advertisers that don’t have as much to spend. 

But that doesn’t mean they aren’t attracting advertisers with deep pockets, too. 

Notable names that spent between $1mm and $10mm include Greenies (Mars’ dog treats), John Deere, Klarna (payment technology), Merrell, 1-800-FLOWERS and Ashley Furniture. 

While Facebook and Instagram will undoubtedly continue to woo SMBs, their unparalleled reach and proven ad tech mean they’ll remain a staple for the biggest advertisers. 

The Perfect Recipe: Facebook + IG

There’s a growing contingent of advertisers investing only in Facebook. Still, they only represent a fraction of Meta’s ad revenue—the 48k advertisers who only bought Facebook ads accounted for just 9% of the ad spend on these platforms.

In reality, the big bucks came from advertisers investing in Facebook and Instagram. 

Case and point: The 12k advertisers who went with a mix of Meta’s platforms were responsible for 87% of the $14.2b ad investment.

Nearly 75% of this spending came from advertisers in five categories: media & entertainment, retail, apparel, technology, and services. 

With the exception of apparel advertisers like Nike and Pandora that leaned heavily into Instagram, advertisers in these categories spread their love fairly evenly between the platforms, ranging from 52% to 56% on Facebook and 45% to 48% on Instagram.

For example, of the $3.5b invested by media & entertainment companies, including website advertisers like Brainjolt and Enphase Energy, nearly $2b went to Facebook, and $1.5b went to Instagram.

At the same time, retail advertisers, including Bridesblush, J. Crew, Amazon, Overstock, Publix and Signet Jewelers, spent $1.3b and $1.2b on Facebook and Instagram, respectively. 

The ubiquity of this 50-50 strategy shows how big brands look at Facebook and Instagram as check-the-box platforms.

In contrast, advertisers with less to spend are defaulting to the safety of Facebook. 

While that’s a logical strategy given Facebook’s standing in the social world, Instagram is just as proven. Neglecting it could be leaving opportunities on the table—and a straight line to the Millennials and Generation Z, who hold all the buying power.

Meta’s Feeling the Heat

For the first time since launching out of Mark Zuckerberg’s Harvard dorm in 2004, Facebook—now Meta—is feeling the heat.

After losing users for the first time ever, Meta’s series of unfortunate events continued with the closing of one of its NYC offices in the wake of cutbacks and a hiring freeze.  

On top of that, Facebook’s stock fell by $232b—the longest one-day value drop in stock market history. 

With everything seemingly going wrong in Meta’s world, the social media giant is pulling out all the stops to regain its footing. 

One of those moves is bringing more ads to Instagram, including the potential for augmented reality ads, which Meta recently started testing. 

Meta announced that it’d also start allowing advertisers to run ads on the Explore home page and in profile feeds. 

While Meta is walking down the only path available—one to make more money—doing so with increasing ad loads is a dangerous game. 

In an online world already jam-packed with ads, Meta will have to find the right balance between revenue and a great user experience. If it does, users and ad dollars will follow. 

For more insights, sign up for MediaRadar’s blog here.

As of Q1 2022, Facebook had 2.93b monthly active users (MAUs). 

To put this into perspective, Instagram, arguably the second most popular social media network, has about 2b MAUs. 

Facebook, or rather the umbrella company, Meta, owns Instagram, too—but that’s beside the point. 

The point is that Facebook is huge and always will be, which is why we’re not surprised that advertisers are spending an almost unbelievable amount of dollars on ads. 

Our upcoming trends report looks at Facebook ad spending in 2021: which industries are investing, which ones aren’t and what it means for the future of advertising on the world’s biggest social media platform. 

Here’s a sneak peek at what you can expect:

Facebook Still Dominates

Any reserved spending habits that advertisers may have embraced over the past couple of years are gone. 

In 2021, advertisers spent more than $44b on Facebook ads, representing an increase of 28% YoY from 2020. 

What drove this increase? 

A giant wave of advertisers. 

Last year, nearly 120k companies promoted more than 142k brands on Facebook. 

To show this growth, in 2020, 45k companies promoted 54k brands on Facebook.

Unsurprisingly, many of these ad dollars came in the months leading up to the holiday season, thanks in some part to Facebook’s push to get brands thinking about their campaigns well before the holidays.

The holiday-fueled ad spending comes during a time in Facebook’s evolution when it’s investing heavily in social commerce.

In June 2021, Facebook launched several commerce-focused features, including personalized Shop ads and visual search, the latter of which lets people find similar products by tapping on an image.

As Facebook makes it easier for companies to generate revenue on its platform, ad dollars will follow—as they have so far in 2022.  In Q1, ad spending was up by 6% YoY from Q1 2021.

It’s clear that, despite some negative press including a class action suit on its ad metrics and reports of a smear campaign against TikTok, companies are spending big.

Retail Up; Tech Down

Who exactly is spending big? Retail, for one.

In 2021, retail advertisers increased their Facebook ad spending by 129% from the previous year as they collectively took advantage of one of the strongest years in retail history. 

After spending relatively little in 2020 due to the fear of COVID-19 and business closures, retail advertisers are back and coming in hot. In fact, total retail sales grew at an annual rate of 14%, the highest in more than 20 years.

Unsurprisingly, the lion’s share of this spending came in Q3 and Q4, increasing by 175% and 174% YoY, respectively, from the same period in 2020.

Of the retail advertisers, those in the auto industry made one of the biggest splashes, increasing their spending by over 22x from what they invested in 2020. A level deeper, used car dealerships increased Facebook ad buys by 403% YoY, undoubtedly due to the increased demand for used cars.

That said, not all advertisers were bullish on Facebook. 

Technology advertisers decreased their spending by 28% YoY in 2021.

Driving that decrease were software advertisers who spent 41% less on Facebook ads in 2021 than they did in 2020. 

Of these software advertisers, one of the biggest decreases came from Capital One, which reduced spending for Capital One Shopping by 71% YoY from 2020. 

In addition, ByteDance, which owns TikTok, essentially eliminated Facebook from its digital advertising mix, spending 98% less than it did last year.

For ByteDance, the decrease has less to do with its overall business health and more to do with the rise of TikTok and its desire to grow that user base.

Service Providers Flock to Facebook

Retail advertisers weren’t the only ones spending big on Facebook in 2021; service providers did as well. 

In 2021, service providers increased their spending by 55% YoY as more than 25k companies bought ads on Facebook (213% more than in 2020). More than half of these ads came from companies in six categories: medical and dental, associations like AAA, AARP and NHL enterprises, home maintenance (due in large part to the rise in working from home), staffing, and recruiting. 

Staffing and recruiting in particular saw a boost in Facebook ad spend—exceeding ad investment of $100M—in the wake of the “Great Resignation” and the parade of people looking for new jobs. 

As we go into 2022, it’s clear these advertisers aren’t cooling off. 
In Q1 of this year, spending was up by 51% YoY from 2021 as companies like Novelty Magazines (Finance 101, History 101, Living 101), Paramount Global (CBS News, Paramount+) and Zillow each invested more than $30mm.

Ol’ Faithful Facebook

Despite younger generations opting for other social media platforms like TikTok and Snapchat, most advertisers are sticking with ol’ faithful Facebook. 

While other platforms are growing exponentially—TikTok reached 1b MAUs in 3 fewer years than Facebook—Facebook’s reach is too vast and its ad tech too advanced for advertisers to veer from such a proven path. 

Want more insight into Facebook’s dominance and how advertisers spent on it in 2021? Stay tuned for our upcoming report that dives deeper into Facebook advertising trends.

No indoor dining. 

Vaccine mandates. 

Curfews that changed operating hours. 

Wonky supply chains and late deliveries. 

Rising food costs.

The list goes on, making it all too easy to see why so many restaurants and bars struggled during the pandemic. 

In fact, approximately 80,000 establishments have temporarily or permanently closed since the start of the pandemic.

For those companies that did stay open, they did so by playing from a different playbook—they had to if they wanted to meet the new demands of consumers and society. 

One part of the playbook that didn’t change, however, was the page that told them how many Facebook ads to buy. 

Let’s explore how restaurants & bars spent on Facebook in 2021, why it might surprise you and what it can tell us about the future. 

The State of the Restaurant & Bar Industry in 2021 

Before we dive into how restaurants and bars spent on Facebook advertising in 2021, it’s important to understand the economic and market conditions in which they did so.  

Understandably, there’s a lot that goes into this, but we can pull out a few key points: 

1. Not Enough Workers

Although there may have been a period when restaurants and bars had to shut down completely, most could technically remain in operation, albeit in a reduced capacity. 

Unfortunately, many restaurants and bars struggled to find enough workers even to maintain this level of function. 

A study showed that seven out of 10 operators didn’t have enough employees to meet demand. 

Even worse, most of them didn’t think the labor situation would improve this year. 

Labor shortages linked to deliveries and other logistical components also had a negative impact. 

A study found that 96% of operators experienced supply delays or shortages of food or beverage items in 2021.

2. Higher Prices 

Between March 2021 and March 2022, average wholesale food prices increased by 17.1%, representing the largest annual increase in almost five decades. 

In addition to that, labor costs increased by 8.6% in 2021.

The only way for restaurants and bars to combat these increases was to raise prices. 

While the move was certainly out of necessity and a last-ditched effort to stay in the green, it came when consumers were already dealing with record-breaking inflation. In 2021, a $20 hamburger just wasn’t in the cards for most people.

3. Lots of Restrictions 

This is a catch-all to include a seemingly endless list of restrictions that played a role in a difficult 2021 for restaurants and bars. 

Whether we’re talking about mask policies, indoor dining restrictions or something in between, these restrictions combined to deal an unimaginable blow to the bottom lines of millions of bars and restaurants. 

In fact, the National Restaurant Association’s sales projection is $110 billion lower than it was in 2020 before the COVID-19 pandemic. 

That said, food and beverage sales are trending up—food and beverage sales were projected to increase by nearly 20% in 2021. 

Unfortunately, that’s still not enough to offset the previous year’s losses. 

Why does all this matter? 

Because it paints a clear picture: Restaurants and bars have experienced unprecedented challenges. 

So much so, that you’d think many of them would adopt more reserved ad spending habits to make up for losses elsewhere. 

That didn’t happen. 

How Restaurants & Bars Spent Their Facebook Ad Dollars in 2021 

Restaurant and bar advertisers increased their Facebook ad buys by 38% YoY in 2021, while the number of companies advertising increased by 261%. 

Similarly, the number of brands advertising on the platform jumped by more than 4.5k or 250% YoY.

Like other industries, the majority of these buys came from a handful of advertisers. 

In 2021, 54 companies invested more than $1mm in Facebook, accounting for 60% of total spending. 

If we go a level down the spending spectrum, we see that 510 companies spent more than $100k, totaling nearly $450mm or 81% of all spending.

Quick Service Restaurants (QSRs) drove much of this growth and have made up the largest share of Facebook advertisers since 2020. 

In 2021, these companies increased their investment in Facebook ads by 20% YoY, thanks mainly to sizable increases from industry powerhouses like Jack in the Box, Wendy’s, Chick-fil-A, McDonald’s and Papa John’s. 

For example, McDonald’s increased its Facebook ad spend by 17x in 2021, while Papa John’s increased it by 385%. 

Outside of QSRs, Casual Dining companies increased their ad buys by 67% YoY, primarily driven by Carry the Curry, which spent nearly 130x more than last year. 

Finally, Dave & Buster’s spent 643% more than in 2020, while Toppers Pizza saw a 327% YoY increase. 

Tropical Smoothie Cafe spent 50x more in 2021, helping propel the Fast Casual category up by 27% YoY.

While the increasing ad buys in the face of so much uncertainty may be surprising, the continued surge this year is not. 

So far in 2022 (January and February), more than 1.6k companies have advertised over 1.7k brands on Facebook, which already exceeds 2020 totals. 

Combined, these companies have invested nearly $70mm in Facebook advertising.

What 2021 Spending Levels Tell Us About the Future of Restaurant & Bar Advertising on Facebook

They say the past is the best predictor of the future—but is this the case with Facebook ad buys from restaurants and bars? 

It very well could be. 

The fact that so many restaurants and bars not only bought Facebook ads in 2021 but increased how many they bought, despite so many unknowns, shows their resiliency and trust in Facebook as a revenue driver.

For those new to Facebook advertising, their behavior during 2021 shows a willingness to think outside the box and experiment with different tactics.

The fact that almost 49% of the brands that advertised on Facebook in 2020 came back for another helping in 2021 means that many now see the value of the world’s biggest social media platform. 

When you take all of this into consideration, there’s no question that 2022 will be a big year for restaurant and bar advertisers on Facebook as they try to make up for the lost time.

For more insights like these, sign up for our blog.

Bread and butter. 

Pen and paper. 

Some things are just meant for each other.

Kind of like Facebook ads and CPG brands, right? 

Sure, that may not roll off the tongue like the others, but it should make perfect sense. 

Take a quick scroll through anyone’s Facebook feed and count the number of ads from CPG brands. 

There are a lot of them—and that’s not going to change as they continue to spend big on Facebook ads. 

CPG Advertising on Facebook in Q1 2022

More than one hundred million dollars! 

(Did you say that in a Dr. Evil voice? We did.) 

More than 750 CPG companies took to Facebook to promote their Beauty, Food, and Household Maintenance Products during the first quarter of 2022. 

Of those companies, 36 of them spent more than $1mm. 

Combined, these companies spent more than $118mm on Facebook ads and accounted for 78% of all ad buys from CPG brands during the quarter.  

The remaining 95% of brands investing in Facebook added another $42mm in buys, bringing the quarterly total to just about $160mm. 

While that $160mm only represents a slight increase of 2% QoQ from 2021, it’s important to note that we saw a 288% QoQ increase during this time last year, so the modest boost this year may just be a signal that we’re returning to normal. 

For other CPG brands still on the fence about buying Facebook ads, this should be the final nudge to push them over in Facebook’s favor. 

How do I look?

In another sign that the world is returning to some level of normalcy—and advertisers are back—beauty brands are buying more Facebook ads than ever.  

Although beauty brands maintained their position as Facebook’s biggest spenders last year, that didn’t stop them from raising the bar; beauty brands have already spent 84% more QoQ than they did last year. 

Brands like Curology, Estee Lauder, L’Oreal, Johnson & Johnson, and Procter & Gamble have led the charge, accounting for 31% of all buys (or more than $155mm). 

Outside of these major players, fifteen additional CPG brands spent more than $5mm in Q1. 

Plant-based haircare company, Vegamour, increased its spending by 6x in Q1, which is impressive considering it decreased it by 20% in 2021. 

Similarly, the popular men’s skincare company, Lumin, has already spent 1.5x more on Facebook ads than in 2021—a year that saw it increase spending by 34%. (Lumin spends 95% of its ad budget on Facebook.)

Finally, Function Inc. spent 46x more on Facebook ads in Q1 2022 than in Q1 2021, while Estee Lauder increased buys by 126% QoQ compared to last year. 

As state- and federal-wide mandates are lifted and society opens, people will continue to venture outside and socialize like it’s 2019. 

Beauty brands will undoubtedly do the same in terms of their Facebook ad buys. 

Seconds?

We’re not one to turn down a second helping of a good meal, but we can’t say the same about some food brands. 

While food brands are still spending a ton on Facebook (they represent 14% of Facebook ad buys in 2022 and 36% of buys in 2021), overall spending decreased by 72% QoQ compared to Q1 2021. (For reference, spending increased by 28% YoY in 2021.)

The most notable brands pulling back from the table were The Hershey Company (Kit-Kat, Reese’s, etc.) and Mondelez (Cadbury, Oreo, Ritz, etc.), which decreased spending QoQ by 77% and 70%, respectively. 

At the same time, Mars (M&M’s, Dove Chocolate, etc.), a major competitor, spent 144% more this quarter than it did during the same time last year. 

It’s impossible to know exactly what’s behind this contrasting behavior, but Occam’s razor may be in play. 

The Hershey Company and Mondelez reallocated their ad spend to other channels, which Mars saw as an opportunity. 

Sometimes, the simplest explanation is the right one. 

Is this actually the reason? 

We can’t be sure, but it’d make sense and be a prime example of the chess game advertisers play as they look for gaps and opportunities in the advertising strategies of their competition.  

Spring cleaning all year round

There’s no getting around the fact that the pandemic has changed—or accelerated the change—of nearly every aspect of life. 

One of those changes is the increased importance people are putting on cleanliness. 

The number of ad buys last year from brands selling Household Maintenance Products reflects that. 

In 2021, these brands accounted for 8% of the overall CPG Facebook spend, growing by 42% YoY. 

Specifically, Johnson Family Enterprises (Method Products, Mrs. Meyer’s, Windex) increased spending by 81%, which represented 37% of its total digital spend. 

Similarly, Tru Earth (MPM Group of Brands) saw an increase of 18% YoY, which accounted for 91% of its total digital spend. The company has already spent more than $1mm this year.  

Unsurprisingly, the spending wave has continued into 2022. 

So far this year, Household Maintenance Products are up 88% QoQ, largely due to the Reckitt Group increasing ad buys for its brands (Air Wick, Finish and Lysol) by 56% QoQ.

There’s No Place Like Home (or Facebook) for CPG Brands 

CPG brands aren’t new to Facebook.

In fact, Facebook saw a 35% YoY increase in CPG ad buys in 2021, bringing total spending to nearly $658mm. (The number of companies and brands advertising on Facebook increased YoY by 106% and 90%, respectively.) 

Even better for Facebook, the numbers throughout this piece indicate that most of these companies felt little buyer’s remorse, which is exactly why we expect the ad buys to keep coming.

Just over a quarter of the way through 2022, we’ve already seen nearly as many CPG brands buying Facebook ads as we did in 2020. 

On top of that, CPG brands that haven’t allocated ad dollars to Facebook in the past—or stopped cold turkey during the pandemic—are changing course. 

In 2021, almost 65% of the companies (1.8k companies) advertising on Facebook weren’t doing so in 2020. 

Similarly, of the brands advertising on Facebook in 2021, 61% (1.9k brands) weren’t there in 2020. 

As the world fights to return to some semblance of normal and people default back to pre-pandemic ways, it’s a pretty safe bet that the ad spending habits of CPG brands will do the same.

For more insights like these, sign up for our blog.

This summer, 11% of B2B digital advertisers bought placements on Facebook. Even though the platform allows marketers to build highly specific audiences, B2B marketers are slow to use the social media site. 

When we take a deeper look, Facebook B2B advertising is growing but not at the expense of traditional formats—and the creative from major companies shows us how. 

B2B companies experiment with Facebook targeting

Over the past year, digital agencies and thought leaders have repeatedly said that B2B needs to follow B2C ways of digital marketing.

“We have deeper and more profound insights and, as marketers, it’s incumbent upon us to do something with that information,” explained Alison Biggan, president of corporate marketing at SAP. “We have to move quickly, and to be comfortable with making mistakes, challenging the status quo. That will manifest as a change in what we’re doing, how we’re investing our dollars.”

Part of this change is moving beyond LinkedIn and experimenting with Facebook as a powerful advertising channel. 

How B2B Marketers Can Capitalize on Facebook

Facebook can identify B2B workers and the size of the company they work for. More importantly, marketers can upload custom audiences that are extremely accurate for audience segmentation. For example, a company can create an audience based on their own email list, website activity, specific page visits and website events. 

Another powerful option is to create a ‘Lookalike’ audience to any audience the marketer has created. Suppose a marketer has created a custom audience using their own email list, they could create a ‘Lookalike’ audience within Facebook and identify people who have very similar characteristics and behaviors. 

With that data, they can generate highly qualified leads—often for a fraction of the price of other ads.

No matter the goal of the campaign, this audience segmentation is powerful for B2B companies just as it is for B2C companies. This is why we see more companies experimenting with Facebook even if it is a small number right now. 

MediaRadar Insights

When it comes to the digital landscape of B2B advertising, there are 25 and half thousand advertisers who spend on digital advertising. 

Slightly more than one out of ten B2B digital advertisers advertised on Facebook this summer (June-August 2021). And their spending is increasing. 

Spending came primarily from: technology, pharmaceutical companies, professional services and the finance sector. 

When reviewing their creative, we found that most companies were seeking to hire or encourage participation in professional associations. 

Top B2B advertisers include: 

• Amazon Logistics
• ASME
• Thermo Fisher Scientific 
• DELL
• Dexcom

Digital spend among these large companies is increasing on Facebook—but not at the expense of traditional print advertising, which is starting to recover. On average, these companies invested $423k in B2B print publications this summer. This is up an average of 280% year-over-year.

From the advertising behavior of these top spending advertisers, we find that B2B ad spend is increasing their expansion into social media, which has traditionally been a consumer format, but they’re not letting go of conventional advertising quite yet.

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy. 

Our data suggests that Facebook has stayed true to form: most of their revenue comes from the cumulation of thousands of small, niche advertisers (with a handful of big brands thrown in.)

And now that the economy is recovering, there has been a massive influx of advertisers. We saw an 87% jump in the number of advertisers in Q2 compared to last year.

Who are these advertisers and have the top spenders shifted?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

Facebook’s growth is on fire

Facebook has been exceeding expectations lately—and recently became the fifth U.S. company to hit a $1 trillion market cap. 

On a Q2 earnings call last week, Facebook reported $29.1 billion in revenue, which was up 55.6% year-over-year. Facebook hasn’t seen this quick of growth since 2016. The company attributed the significant growth to increased ad prices (a 47% average price increase per ad) and the continued demand for digital transformation among small businesses.

According to Mark Zuckerberg on the earnings call, more than 3.5 billion people actively use one or more of Facebook’s services.

At that scale, it’s no wonder people assume that Facebook is a monopoly. But a judge dismissed an FTC complaint about the outsized nature of the company in June. With that ruling, Facebook didn’t face any immediate breaking up of the company. 

But it does recognize that regulatory and industry headwinds are still on the way. 

Antitrust bills are making their way through House and Senate committees. And with the Apple iOS 14.5 update that took place, only 4% of American users opt-in to tracking. 

Though Facebook surpassed analyst expectations, they’ve warned investors that the fast growth won’t last forever. But for now, advertisers are still flocking to the platform. 

MediaRadar Insights

With this earnings update, we were curious to see how spending on Facebook has shifted across categories since last year.

Overall, in Q2 2021, 37.3 thousand advertisers spent $5.5 billion specifically on Facebook (not including its other services). This is up 52% in spend from Q2 2020 where 20 thousand advertisers spent $3.63 billion.

Facebook brings in most revenue from small advertisers, but last year tech was a big spending category as it largely benefited from the pandemic. Between 2020 and 2021, the biggest shift in spending has happened between ‘Tech’ and ‘Other.’

Tech dropped its spending by 7% and the ‘Other’ category (which is made up of highly niche and local businesses) increased by 4%. 

The remaining categories roughly stayed the same. 

“Our strongest verticals are those that have performed well through the — throughout the pandemic, including e-commerce, retail, and CPG. And we’re also seeing continued recovery in others like travel that were hit hard by COVID,” said Chief Operating Officer, Sheryl Sandberg on the earnings call. 

She pointed to a success story of a small business in New York City—The Pizza Cupcake. During the pandemic, the company (that used to operate at popup shops) was forced to become an eCommerce food service. 

With Facebook’s different solutions for small businesses, the company was able to expand not just in the New York area, but across 28 states.

The total ad spend from these smaller ‘Other’ brands totaled $485mm in Q2 2020, and increased to $997mm in 2021.

Facebook’s different solutions that make digital transformation possible for small, family-run businesses are what make it unique as an ad tech solution. But that being said, that doesn’t mean national brands don’t use the service.

In Q2 2021, the top five advertisers were:

• HBO Max
• Capital One Shopping
• Disney+
• Walmart
• The Home Depot

Their spend totals $192 million, which is only 3% of all spend. This suggests that like previous quarters, Facebook revenue is primarily made up of smaller campaigns targeting specific audiences.

Curious how the top spenders have changed from last year?

In Q2 2020, the top five spending brands were: 

• Capital One Shopping
• Wix
• Biden for President
• AT&T
• Progressive.

The only top spender that remained consistent was Capital One Shopping, indicating another advantage of Facebook advertising: its flexibility. 

Advertising spending on Facebook can change depending on which brand’s are benefiting from the pandemic at the current moment, and which ones are still struggling. As the pandemic changes form, we’ll keep you updated on our most recent data. 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.

One thing is certain: it’s massively successful at selling ads. A question we’ve been getting a lot lately is whether advertising on Facebook counts as direct buying or programmatic. 

At first glance, it may seem that buying on Facebook is direct. After all, Facebook makes it incredibly easy to buy Facebook inventory directly on Facebook. 

However, these ads are served programmatically. 

Facebook Ads Manager acts as a unique Demand Side Platform (DSP) built for programmatic advertising. And when you look at the data, only a small portion of Facebook advertisers buy direct digital ad space anywhere else. 

What makes Facebook’s DSP unique

Most DSPs buy programmatic ad inventory across thousands of websites. But they can’t buy inventory from Facebook because Facebook offers its own Ads Manager. 

Facebook Ads Manager acts as a DSP because it allows advertisers to easily serve targeted, personalized ads programmatically. The main difference is that it only offers its own inventory (plus that of Instagram). 

The Facebook system is designed to enable easy, highly measurable and personalized targeting for brands. The majority of brands using Facebook heavily rely on this type of advertising and do very little direct buying across other websites. 

According to MediaRadar data, 17,400 companies spent $3.8B on Facebook in April. Of these brands, only 543 of them purchased direct digital ad space elsewhere. We’ll dig deeper into this data below. 

Facebook ad buyers heavily rely on programmatic digital advertising. But Facebook, along with publishers and the entire adtech system, are going through major privacy changes. In the next era of privacy-forward data policies, we’ll likely see changes in how brands purchase digital advertisements.

Apple’s new update will impact Facebook and small programmatic buyers 

Last month Apple rolled out the iOS 14.5 update that Facebook and other adtech players had been fretting over since its first announcement. 

The big change everybody’s been obsessed with is the new privacy framework called the App Tracking Transparency (ATT). When users open an app, they’re presented with an opt-in button that asks them to allow or deny tracking across other websites or apps. 

The notice reads: “Allow [app] to track your activity across other companies’ apps and websites?” Users tap “Ask App Not to Track” or “Allow.”

Facebook has opposed these changes, but has also acknowledged that digital advertising, data collection and consumer control of their privacy are evolving. 

Facebook has troves of first party data and the resources to build up eCommerce functionality over the next few years. The company is guiding advertisers with the necessary actions they need to take to reduce disruptions to campaigns.   

Not much of a surprise here: People prefer their privacy

The app analytics campaign Flurry has been tracking opt-in rates since the update. It doesn’t come as a big surprise that opt-in rates are low. 

Two weeks after the rollout, only 4% of U.S. users said ‘yes’ to sharing their data with third-party apps and websites.

This low rate means more challenges for advertisers than just highly personalized targeting.

“It will be harder for all Facebook advertisers to associate performance with their ads, full stop,” explained Josh McClauss, vice president of marketing at performance marketing agency Metric Theory. “Facebook has already prepared advertisers for this by eliminating insights into performance beyond seven days from a click, but now they’re going to lose even more insight.”

Unless advertisers have the resources to develop more advanced modeling, they’ll have less understanding of what’s driving the most revenue for their brand. 

These changes could potentially result in revenue loss for Facebook, but it will be an even bigger struggle for small brands that rely on the platform. 

MediaRadar Insights

Let’s go back to the roughly 500 brands that purchased programmatically on Facebook and directly elsewhere. 

These brands make up 5% of monthly spend on Facebook, which equates to $177mm in April—and they only buy programmatically on Facebook, rather than on other DSPs.

Their direct digital spend is 47% less than their investment on Facebook.

In April, top brands who purchased programmatic advertising through Facebook, but not on other digital platforms include: 

• State Farm
• Tylenol
• Target
• Xfinity
• HelloFresh.

*We track advertisers on Facebook who spend at least $30k in a year

As Facebook and the digital advertising ecosystem goes through major changes, we’ll continue monitoring top spending brands and emerging trends. 

For more details on Facebook advertising, read our latest Facebook advertising trend report. 

Gen Z is getting older and about to be a huge buying power. How are advertisers using the two platforms? And which brands spending big on Snapchat represent opportunities for other publishers?

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

Snapchat Appeals to Younger Consumers

Facebook performed exceptionally this past year and its revenue keeps climbing, but even the strongest of businesses can’t capture every consumer. 

Facebook has had issues appealing to teenagers for years—but now Instagram is also struggling with their aging user base.

A recent study from financial firm Piper Sandler found that Snapchat and TikTok are now the two top platforms for teens and those in their early 20’s. 

Snapchat’s number of daily active users keeps growing, which is attributed to their fun features like Lens Studio 2.0, Camera Kit, Snap Minis and Bitmoji for Games. CFO Derek Andersen has previously noted how Snap’s investment in original content is also a driver of growing ARPU. 

While Snap builds out innovative features for consumers, they’re also creating new spaces for advertisers. Snap ads are full-screen, interactive and offer a wide variety of CTAs. It’s a much more visual experience for consumers, and brands are limited to one line of text.

Q1 2021 was an exceptionally strong quarter for Snap. The company outdid forecasts and generated positive free cash flow for the first time as a public company. Which type of advertisers are they attracting?

MediaRadar Insights

Before jumping into the Snapchat data, we’d like to add some context. We’ve recently started covering Facebook advertising and how their advertisers compare to other ad spaces, like broadcast TV. This leads us to comparing the two social platforms. 

Facebook is a powerful tool for brands large and small, but a significant portion of their revenue comes from really niche brands using their platform for its hyper-targeting features. 

When looking at April Snap data, we found that ad spend on Snapchat increased 24% year-over-year. And many of those advertisers weren’t on Facebook.

Typically, the overlap between the two platforms is fairly low—only 22%. 

Facebook attracts a very wide selection of advertisers (21% of their advertisers were categorized as ‘Other’ because they didn’t make up more than 1% of a single category). 

But Snap’s advertisers tend to fall into more distinguishable categories (only 6% are ‘Other’).

Entertainment makes up the biggest category of Snap’s advertising revenue. We’ll break down the biggest spenders in this category, but first we want to highlight streaming companies. 

Streaming companies buy ads on both social platforms. Streaming services made up all 7% of all spend on Facebook last year.

In April, streaming spend accounted for 6% of all ad spend on Snap. Advertising from HBOMax, Paramount+, BET+, Hulu and Amazon Prime totaled over $2.8mm.

Even though streaming accounted for significant advertising spend, Action/Thriller films spent even more on Snapchat.

The top spending Action/Thriller films include:

• Tom Clancy’s Without Remorse
• Mortal Kombat
• Fast & Furious 9 

Together, they spent over $5 million.

Note: Fast & Furious 9 is one of the newest films to not feature both a theatrical and streaming release. Instead, Universal pushed out its release date to coincide with lifted pandemic restrictions.

Other top spending categories on Snapchat are:

• Fashion
• Pharmaceutical
• Retail

Each of these categories make up roughly 10% of spend on Snapchat in the month of April.

For publishers looking for opportunities, top spending brands on Snapchat worth paying attention to are: 

• Zyrtec Allergy
• Nike
• Levi’s
• Columbia
• Lids
• ShopDisney

These brands are contributing to Snap’s increasing revenue. Interested in more details on Facebook advertisers? We recently released our Facebook Advertising Trend Report. To learn about what’s driving their success, check it out. 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy. 

As the social network with the most annual revenue, we know that Facebook is great at bringing in ad dollars. And from the data, we can see that they’re getting better at drawing in dollars that traditionally go to TV. 

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

Large brands want flexibility and precision 

Advertisers want the flexibility and precision that programmatic video ads offer. And though big brands were traditionally willing to trade targeting for reach by using linear TV, the pandemic drove adaptability to become the “new black.”  

In 2020, TV Upfronts were cancelled due to the pandemic and much of the ad spend shifted to digital—especially programmatic. And that shift has continued into 2021. 

“Last year, flexibility was such a big need for clients for financial reasons, with all the business implications brought on by the pandemic—that type of flexibility, in our clients’ minds, is a mainstay need now,” said SVP of strategic investment at Magna Global, Molly Finnerty, to Marketing Brew.

TV networks provide massive scale for brands, but with the disruptions to the entertainment industry and the continuing decline of cable, brands aren’t as willing to pay for less than quality reach anymore. More than ever, advertisers want to be able to plan short-term and trust that their ad will reach the right audience.

This is why many ad dollars quickly shifted to programmatic video advertising. Though there are many digital options, Facebook is a popular choice because it makes buying so easy and has one of the most engaged and massive audiences. 

MediaRadar Insights

The overlap between Facebook and broadcaster advertisers continues to rise, suggesting Facebook may be getting better at winning these advertisers.

We focused on Fox in this case, but a similar story could have been shared from other major broadcasters. Of Fox’s advertisers in Q1 of last year, one out five advertisers also bought on Facebook. Now, five quarters later, it’s one out of three. 

To us at MediaRadar, this means that Facebook is pulling some of the broadcaster’s share of ad dollars. This pattern can be seen across formats. 

For example, when we look at Fox, the overlap in Q1 increased 12% between 2020 and 2021. 

We see a similar story across broadcasters. 

The overlap between NBC advertisers and Facebook in Q4 of 2020 is identical to FOX, with 34% of NBCs advertisers overlapping with Facebook. 

Though Facebook’s main strategy is to attract super niche advertisers, this data may suggest Facebook is simultaneously going after linear TV advertisers. Because the data is similar across networks, it doesn’t seem that they are pursuing advertisers exclusive to any single channel.

Ad Placement Trends on Facebook vs TV

Overall, when it comes to ad buying behaviors, Facebook isn’t that different from broadcasters. 

While Facebook is consistently expanding in broadcasting’s network of advertisers, the physics of how advertisers run campaigns is not that different from traditional media companies:

• Retention rates: Year over Year (January – March) 2020 vs. 2021, 34% of advertisers remained identical, which is strong retention and similar to broadcasters
• Campaign length: 44% of campaigns on Facebook last 1 month or less (over a 15-month period). Campaign lengths on Facebook are not different from other media formats.

Most companies understand their prime season for marketing. Though they may have some advertising throughout the year, they will invest heavily in campaigns for one or two months at a time. 

The data suggests that Facebook is pulling some of the broadcaster’s share of ad dollars, but buying patterns from the advertisers remain very similar. This pattern can be seen across formats, and over the next few week’s we’ll be focusing on the overlapping trends between Facebook and other media formats. 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy. 

In March, online sales were up 49% year-over-year (YoY), making this the biggest increase since July 2020 when Americans received their first round of stimulus checks. Despite vaccines, people are still shopping online and it makes sense that brands are buying ads in the digital space.

Facebook advertising, in particular, keeps on climbing. Revenue was up 46% YoY in Q1. Even in Q2 last year, when successful media companies were stumbling due to the pandemic, Facebook’s ad revenue grew by $2 billion. 

What’s driving Facebook’s growth and what changes do we expect to see later this year? 

We encourage you to subscribe to our blog for the latest data surrounding the advertising industry. We will provide daily updates as COVID-19 continues to make its mark on the US economy.

Will This Revenue Surge Last?

According to Facebook’s commentary, the striking growth in Q1 profit was driven by a 30% YoY increase in average ad price and a 12% increase in the number of ads delivered. Facebook anticipates revenue growth to remain fairly stable in Q2, but is betting on headwinds in the second half of the year. 

“We continue to expect increased ad targeting headwinds in 2021 from regulatory and platform changes, notably the recently-launched iOS 14.5 update, which we expect to begin having an impact in the second quarter,” according to Facebook’s press release.

Other tech analysts, like Tae Kim at Bloomberg, point out the transition into a post-pandemic world may slow down growth momentum. When stores and shopping patterns return to traditional patterns, hyper-personalized targeting and digital experiences may not be as critical.  

CEO Mark Zuckerberg is well aware of the opposing forces coming his way and expressed what his company plans on doing about it. 

“These efforts around creators, commerce, and the next computing platform are a few of the big areas that we were doubling down on going forward,” said Zuckerberg. “And in each of these, there is a unique opportunity to help people connect in deeper ways and to support a stronger economy for everyone.”

It’s clear that Facebook is focused on creating long-term solutions that enhance the experience of users and businesses. Its growth rate may slow down later this year, but by significantly investing in a new vision of AR/VR and online shopping, the platform will likely see strong performance over the long haul. 

MediaRadar Insights

MediaRadar began tracking Facebook advertising at the beginning of 2020 by analyzing the ad buying behaviors of brands who spend at least $30,000 annually on the platform.

The most interesting categories are Entertainment, Retail and ‘Other.’ The reason why ‘Other’ is so significant is that many Facebook advertisers are really niche and don’t fit into a typical category. 

Entertainment brands, especially streaming platforms, spend the most on Facebook ads. But, when looking at the volume of brands, Retail brands lean on Facebook the most. 

And this stays fairly consistent year-over-year.

There are 4,600 retail brands who placed ads with Facebook this past quarter, and 62% of them are super niche. Facebook is a great platform for them because it makes hyper-personalized targeting easy and affordable for smaller brands. 

Though these small brands aren’t spending as much as large Entertainment companies, the small buys add up. 

This strategy makes Facebook unique. On Facebook, the Retail category accounts for 16% of all advertisers, but on all other digital platforms this category makes up about 10% of advertisers.

And of these 4,600 brands, more than half (56%) advertise exclusively on Facebook. 

Because Facebook offers such targeted advertising, niche advertisers such as cheese retailers, telescope retailers and dog leash retailers are able to target their audience with more accuracy than a traditional programmatic campaign. This is why the “other” category makes up 62% of retail advertisers—very small campaigns can purchase effective space.

We have a trend report coming out with more in-depth Facebook insights coming out soon. Subscribe for trend report updates. 

For more updates like this, stay tuned. Subscribe to our blog for more updates on coronavirus and its mark on the economy.