No Black Friday Savings for Meta Advertisers
We dive into cost of advertising trends over peak shopping season
It kind of feels like instead of seeing an ad between every 5-10 Instagram/Facebook stories, your content seems to be monopolised by ads of late, doesn’t it? (Sorry, but it definitely will now). As we enter peak shopping (and peak advertising) period this shouldn’t really be a surprise. It’s that time of year where, as consumers, our will power is perpetually pitted against “% off” prices, and as advertisers we also need to grapple with a few consequences. Firstly the challenge of higher CPMs and secondly our need to deal with them.
HIGHER CPMs – More competition
As more advertisers begin flooding to social platforms to push Black Friday and Christmas deals, there is more competition for our eyeballs. In an ad auction system this increased demand to reach users results inevitably in an increase in CPMs (cost per 1000 ad impressions).
Simply put it means that in order to deliver the same number of ad impressions around this time of year, you’ll need to spend more ad dollars to do so. And therein lies the incentive for big platforms to cram in as much ad space as possible around their ecosystems, to accommodate increased ads, and with them increased revenue.
Space & Time looked at a portfolio of clients over the past couple of years to map out changes in Meta CPMs and although times have been slightly unprecedented, one thing that quite clearly prevailed were the spikes in CPMs over this time. It follows that during lockdown CPMs reduced significantly because advertisers globally were pulling spend in their droves. The few clients who did persist with mainly awareness campaigns over this period were able to benefit massively from abnormally low advertising costs, which in the main drove positive uplift on direct response activity when life began returning to normal. We see a lot of value in bucking the trend during periods that historically experience curtailed ad spending, because ultimately investment at these times can work harder for clients, warming customers ahead of peak trading times.
At times when competition for eyeballs forces CPMs upwards advertisers will need to do more just to stand still. A typical £500 budget in October would have a reach roughly equivalent, in November to a budget of £850.
CHANNEL CHOICE – So do we just need to grin and bear it?
Due to market forces advertisers are limited in how they can drive down CPMs within contained trading ecosystems like Meta. Mitigating this therefore requires a bit more flexibility in media plans and being braver with new channels and making the most of first-mover advantage. Although TikTok advertising is not as new-to-market as it was a year ago (the nature of time), when it comes to advertiser competition on the platform, it still doesn’t touch the tried and trusted platforms like Meta. As it stands, we’re still seeing comparatively low CPMs across TikTok accounts and as the publisher’s advertising tools have become more sophisticated, we’re experiencing greater efficiency in using the platform to drive awareness and prospecting. Exploiting channels like Meta for chasing lower-funnel conversions with all the custom audiences and retargeting frameworks you’ve built into your ad structures and perfected over the years does have its place, but when you’re reaching out to wider audiences it’s worth exploring channels that will get you additional bang for your buck. After all, it’s hard to argue with a healthy “% off” those CPMs!
If you’d like to find out more about exploring uncharted seas of TikTok advertising and TikTok shopping, get in touch here.