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Facebook Ads in Uncertain Times

 In Paid Social, PPC

A simple solution for a business to save money during an economic crisis is to cut back on marketing spend. When the economic crisis impacts the entire world, that’s a lot of cutting back on marketing. This is essentially what’s happened over the last three-plus months, causing Facebook media costs to become significantly cheaper and allowing advertisers to buy media at a major discount.


According to the New York Times, prices for Facebook ads were at a record low in May, dropping a reported 35 to 50 percent. So while overall usage of the social media platform continued to increase given that all non-essential employees have been working from home, theoretically giving them more leisure time, the site’s advertising has experienced the opposite effect. As the inventory has increased, the competition to reach the new-found inventory has actually decreased.


Facebook isn’t the only social media platform experiencing a decline in revenue related to ad spend. The New York Times also reports revenue forecasts for Google, Twitter and Pinterest have also been substantially lowered in these uncertain times with the average daily ad spend continuing to trend downward. Sports and entertainment advertising have been nonexistent in recent months with all major and college sports indefinitely postponed and bans on the types of gatherings needed for entertainment events. Advertising spend on travel has also experienced a sharp decrease due to travel restrictions, stay-at-home orders and the temporary closing of hotels.

While major corporations, big spenders and household brand names have been forced to pull back or pause their Facebook spend, many small businesses and e-commerce accounts have been able to thrive during the pandemic with products and services still in demand and a barren advertising landscape to promote these products and services. While businesses with low daily spend budgets continued to see rising prices, CPMs and CPCs are no longer being pushed aside by audience competition from bigger budgets. The oversaturated Facebook ad marketplace has once again become a welcome place for small budgets and cheap views and clicks.


Paid social spend has become a marketing Catch-22 in that inventory has never been so inexpensive and the landscape so uncompetitive — but at the same time, no one can predict what will happen economically in each industry and individual business. Marketing dollars spent today might be better spent or saved for other business needs in the coming months.

If your line of work hasn’t been impacted by the global pandemic and the last few months have been business as usual, then now is the time to scale up and not down on Facebook advertising. Eventually, those CPMs and CPCs will return to where they once were.

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