Facebook Advertising Trends Report: Q4 2020 was a turbulent quarter but with many opportunities

In 2020, ecommerce advertisers’ Q4 performance was more important – and less certain – than ever. 

With more advertisers selling on Facebook and consumer confidence at an all-time low, it was difficult for ecommerce businesses to establish how effectively their campaigns would perform.

However, the insights from our portfolio of ecommerce clients demonstrate that, despite a busy auction, there were plenty of opportunities to drive value on Facebook.

In this report we look at the trends we identified on Facebook for Q4, from CPMs and CTRs, through to CPC across different global markets. We also identify the key trends that ecommerce advertisers encountered in the auction.

Facebook Platform Metrics

Ecommerce advertisers experienced a very different peak season in Q4 2020. CPMs rose earlier in the month in the run-up to Black Friday/Cyber Monday as advertisers extended their holiday sales periods, and CPMs peaked at 9% lower than in 2019.

Meanwhile, 24% YoY drops to clickthrough rates in Q4 significantly drove up CPC, minimising the benefit of lower CPMs across the quarter.

Overall, the UK was the most competitive market, with a 28% increase to CPC, while the US offered more value with a -2% drop to CPC. 

While CPC for ROW markets increased 18%, CPMs were 168% lower than the US and 132% lower than the UK, so presented advertisers with an efficient way to drive value.

CTRs decreased

CTRs decreased every quarter as the surge in online shopping increased competition for ad inventory across Facebook and Instagram.

Cross-border strategies drove performance

Ecommerce advertisers that adopted a global strategy experienced 25% lower CPMs and CPC than market-specific campaigns.

Dynamic Product Ads grew in popularity

Throughout the quarter, Dynamic Product Ads attracted spend increases of 124%, however, CPMs rose too.

Video CPMs dropped

As many advertisers focus more on product-based ad formats, video CPMs declined 63% YoY.

Although Q4 was a challenging quarter, increased intent to buy among shoppers led to higher conversion rates, and meant that many of our ecommerce clients achieved lower CPA than in previous quarters.

The strategies, tools, and creative that drove efficient performance in Q4 should all have an important place in advertisers’ approach to 2021, which is likely to be another unpredictable year.

Find out more in our Q4 2020 Facebook Advertising Trends Report: