Facebook Ad Clicks Set Record in Q4 2013, But Concerns Linger

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A Facebook employee attends an event at headquarters last April. In Q4, Facebook ads were clicked more than ever before, but other data has at least one marketing partner concerned.

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By Kurt Wagner2014-01-25 16:11:33 UTC

It was another solid quarter for Facebook ads in Q4 of 2013, as the company recorded its best quarter ever in terms of overall engagement, according to new research from Adobe.

Facebook saw record highs in areas such as total ad clicks and click-through rates last quarter, according to Adobe's Q4 2013 Social Intelligence Report, which analyzes ad clicks and referral traffic for most major social networks. The social network's click-through rates were up 365% over Q4 2012, and total ad-click volume more than doubled over the same time period last year.

See also: The Future of Facebook Ad Revenue: Small Businesses

A separate study conducted by advertising platform Kenshoo Social found similar increases when comparing Facebook's Q4 2013 to the previous quarter. In a study of more than 115 billion Facebook ads, Kenshoo found that totals clicks increased by 66%, and the click-through rate was up 10% in Q4 over Q3.

Facebook's high ad engagement should mean a solid earnings report on Wednesday when the company announces its Q4 and 2013 earnings. However, Adobe's Social Intelligence Report was not completely positive for Facebook, and some of the findings may even be cause for concern, according to Tamara Gaffney, principal analyst for the Adobe Digital Index.

Indeed, Facebook is facing stiff competition when it comes to referral traffic. While it still drives more traffic to third-party retailers than any other social network, its share of the market in Q4 2013 dipped by 15% over Q4 2012. The reason? Both Pinterest and Twitter nearly doubled their referral traffic year-over-year.

"We did see Facebook continue to lose share to Pinterest and Twitter in terms of last click referrals," Gaffney said. "[Facebook] is still the big kahuna. But over the course of time, if Pinterest and Twitter grow at a [much] faster rate than Facebook does, it will start to create bigger competitive pressure on Facebook."

Facebook still refers more users to retail sites than any other social network, but Pinterest and Twitter are gaining ground.

The other warning sign Gaffney noticed was Facebook's click-through rate on ads, which was growing exponentially, but flattened out between Q3 and Q4. (This is the same metric where Kenshoo saw a 10% bump.) It's possible that this flatline is due to a lack of advertising creativity, but Gaffney isn't convinced that's the case. "We don't have enough data to say that Facebook hit its growth peak," she said, "But I believe it might be that."

One social network to focus on in 2014 will be Pinterest. Retailers in the UK already generate more revenue from customers referred by Pinterest than any other social network. In the U.S., Facebook claims that title, but Gaffney said she expects Pinterest to overtake Facebook by the end of the year.

Adobe's report analyzed 240 billion Facebook ad impressions to develop its findings. Both Adobe and Kenshoo Social are part of Facebook's Strategic Preferred Marketing Developer program, which means they drive "outstanding positive impact in [Facebook's] marketing developer ecosystem."

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Topics: Advertising, Facebook, pinterest, Q4, Social Media, Twitter