The demand for paid advertising on Facebook is decreasing as brands react to the uncertain economic situation. This is further revealed by new leading data from social media analytics and artificial intelligence platforms, Socialbakers. The platform, dedicated to supporting the needs of marketers, recently examined the likely impact of COVID-19 on brand’s Facebook ad spend, CPC (cost per click) and engagement in the first quarter.
Overall, the study found that paid advertising is going down as well as cost per click, while organic content is going up.
Key Highlights from the Study :
- Comparing paid ads to organic content, Socialbakers found that brands across all regions have been sharing more organic content since the start of the year, as paid ad budgets are likely to be frozen due to economic uncertainty. This finding is correlated with the data we observe regarding cost per click (CPC).
- In North America, in early December 2019, the CPC was around $ 0.64. By mid-March, data shows that the CPC had almost halved to $ 0.32.
- The data for Western Europe is similar. As of December 2019, the CPC was around $ 0.43. By mid-March, the data shows that the CPC had more than halved to $ 0.20.
- If we look at benchmark advertising spending in all regions, we see that from March, advertising spend quickly started to increase in East Asia with the recovery of business. In regions such as Western Europe, Southern Europe and Southeast Asia, advertising spend began to drop from the start of March.
- North America experienced the largest drop in advertising spend since the start of March, when the COVID-19 virus began to take center stage in the country. Advertising spend fell by almost 50% between December 2019 and mid-March 2020.
- Global engagement data for brand profiles by region shows that engagement levels have remained stable throughout the year . However, as people continue social distancing in the real world, we will soon see that this translates into engagement on social media.
“The data on Socialbakers reflects what we hear from brands. Due to the uncertainty of the economic environment, they are slowing investment. This trend should continue as companies are looking for cheaper alternatives to engage their audience. This means that organic strategies, focused on good content, could prevail during this period. – Yuval Ben-Itzhak , CEO of Socialbakers.
“Reducing investment in social media could be a mistake on the part of brands. Brand marketers should be aware that, faced with the prospect of social distancing and more time at home, their audiences will turn to the digital world to feel connected, updated and entertained.
Paid or organic: we find that brands from all regions systematically display less paid content.
CPC: Facebook CPC costs have slowly decreased since the beginning of the year in all regions (W-EU, S-EU, North America, E-Asia, SE-Asia), however in East Asia, the CPC has started to increase again as business starts up in the region.
- If we look at advertising spending in all regions, we can clearly see that from March onwards spending quickly picked up in East Asia, with business picking up.
- While in regions such as Western Europe, Southern Europe and Southeast Asia, advertising spend started to decrease from March.
- North America is the region where we have seen the largest drop in advertising spend since the beginning of March, when COVID-19 began to take center stage.
Global engagement: We have examined the global engagement on brand profiles by region. The data shows that engagement levels have remained stable throughout the year. However, we anticipate that as people practice social distancing in the real world, we will soon see this translate into engagement in social media in the digital world.
A study and analysis by Socialbakers, leader in social media analysis.