To suggest that the impact of Covid-19 is anything but a significant net negative, globally, would be incorrect and, frankly, crass. For individuals, for families, and for businesses this is a challenging and difficult time of crisis.
That said, every crisis brings with it upsides that can afford businesses some respite from the economic pain that’s being felt. Specifically, a number of our clients are seeing a dramatically cheaper advertising market on Facebook and Instagram, coupled with conversion rates that have actually - in many cases - improved.
COVID-19 Insights: Facebook Auction Prices
Facebook is seeing higher user visits and scroll time than ever before as populations are increasingly at home, perhaps furloughed, and eagerly in search of news and updates from friends and family.
At the same time, ad markets are experiencing an unprecedented downshift in ad demand; the April 2020 ad market has been hit by around 50% in the UK, with no-one buying cars, treating themselves to event tickets, supermarkets not wanting customers, and people unable to travel anywhere.
As a result, ad supply is up (more eyeballs to look at Facebook ads), while demand is down. And this has had a telling - and unsurprising - impact on ad prices (most easily measured by CPM - cost per thousand ad impressions).
To offer some meaningful insight on current ad prices, we’ve amalgamated data from a portfolio of our managed Facebook ad accounts. These ran consistently, without major changes to audiences or daily spend, since 1st March.
Starting w/c 2nd March, and accelerating w/c 9th March we see CPMs dropping from c. £5.75 to c. £3.00.
The two factors in play here, as mentioned above, are a significant reduction in competition as advertisers pull advertising spend, and a surge in ad supply caused by increased consumption of social media content.
Of course, greatly reduced CPMs alone don’t necessarily mean an increase in opportunity or uptick in ROAS. Crucially, then, the same set of predominantly UK clients not only saw conversion rates hold, but in many cases they dramatically increased as the UK entered lockdown.
With the amalgamated advertisers spanning gardening, furniture, DIY brands, #selfcare, crafting and health & beauty, we saw uplifts in conversion rates as consumers, adjusting to new living conditions, spend on life’s new necessities.
And while we don’t have the data to back this assertion up, there is a suspicion that there is less shopping around. If consumers can find a retailer who has stock and can deliver in a reasonable timescale, they are buying and buying faster.
If all brands could take advantage of this unique market, then it wouldn’t exist. But who are still able and willing to drive awareness and demand, we’d urge them to strongly consider whether they can afford not to interact with a less competitive and more lucrative ad space.
SearchStar is a Facebook Marketing Preferred Partner. If you'd like to talk in greater depth about Facebook and paid social to better understand how it can drive your business objectives during this period, please don't hesitate to get in touch with the team here...