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Facebook Ad Spending And Higher CPMs

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If you're a marketer on Facebook you should be paying attention to the pricing of your Facebook ads. Big brand marketers are flooding the market with a glut of spending.
Facebook ad spending and the rise of CPMs

If you’re a marketer Facebook ad spending is probably on your mind. You should be paying attention to the pricing of your Facebook ads. Big brand marketers are flooding the market with a glut of spending. Marketers of all shapes and sizes are pulling out their last allocation of budget for the year, usually a substantial amount reserved for the buying season, and spending on Facebook and across digital environments. Spirits brands will be promoting holiday gifts and get togethers. I recall in the last 45 days of 2013 I spent over $1MM in Facebook ads for a large spirits advertiser, and that was for just one very tasty spiced rum brand. Big box stores will be messaging about Black Friday specials. Consumer packaged goods advertisers will be talking about Christmas gifts. Travel companies will be sharing holiday specials. Car manufacturers will also be messaging about gift giving season. And certainly, these all compete with the existing flow of marketing that is evergreen, including remarketing and funnel based media activations.

So, we’ll see a generally higher CPM in the marketplace in Q4. According to ValueWalk CPMs globally in 2014 were $4.40 and $6.38 in Q4 of 2015. In addition to there being an annual increase in global CPMs, the cost for ads on Facebook will decrease a little during the year, and spike again in Q4.

Incidentally, advertisers across the board are seeing these CPM increases. A different report from SalesForce reveals that CPMs on Twitter pop during the holidays. CPMs popped in Q4 2015 to over $10, while in Q3 2015 they were at $3.67 and in Q1 of 2016, $6.93 globally for Promoted Tweets.

The trend holds true for Pinterest, where the CPM jumps from $3.51 in Q3 2015 to $5.43 in Q4 2015, and just keeps rising to $8.10 in Q1 2016 in the US.

The implication for advertisers in the marketplace are to keep closer track of your campaigns. Be prepared to bid higher for your inventory. Big brands are up against a time line. If they don’t spend in full by 12/31/16, many of them (arguably most) will lose those budgets to corporate overlords, so they will spend those dollars at a CPM premium. Keep your creative and your offers fresh to improve your relevancy score. Rotate in new creative executions. Use the available stock photos on Facebook. Continuously test new headlines, pictures and videos. Offer holiday related, or topical, sales and discounts to ensure your messages resonate with your audiences. Use visuals that speak to the audience and their relationship to this time of year. Even products that are not holiday related can benefit from topical visual references.

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Robert Brill is Founder and CEO of BrillMedia.co, a hyperlocal marketing agency.

818-720-1632 I [email protected]

Robert Brill

Robert is the CEO of BrillMedia.co, host of the LA Business Podcast, and host of The Great Reset on YouTube.

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