Social media use is up, but advertiser demand is down – and that dynamic means brands that are spending right now can get a lot of quality reach for low prices.
CPMs on social are down on average between 15% and 30% across the board, according to five media buyers that spoke with AdExchanger. Facebook CPMs have dipped as low as 50% for some brands in certain categories, according to eMarketer.
Meanwhile, time spent with social media in Q1 grew 8.8% year over year to 82 minutes a day, according to eMarketer. And buying activity increased 25% during the same period, per Kenshoo.
Advertisers are taking advantage in different ways.
More conservative brand advertisers in the consumer health and FMCG verticals are sticking to their pre-pandemic media plans, hoping to extend their reach while maintaining spend and returning the savings to the bottom line.
“If you’re in a marketplace that’s more efficient but traffic and performance are maintaining, can you maintain pre-COVID levels and recoup the savings?” said John Terrana, EVP of media solutions at VaynerMedia.
Others have an appetite to test new platforms as prices drop and user behaviors evolve.
Procter & Gamble, for example, created a dance challenge with TikTok influencer Charli D’Amelio to promote social distancing that has been viewed more than 10 billion times; P&G has extended the campaign as a lens on Snapchat as well.
Chipotle also launched a TikTok challenge on Cinco de Mayo with influencer David Dobrik that encourages users to post a video for a chance to be sponsored with free food.
Other brands are leveraging new search behaviors on Pinterest to rethink assets based on user behaviors.
Native, a natural deodorant brand that takes about two weeks to work properly, used branded pins to communicate that this time of sheltering in place as a great “transition period” to try out the product without worrying about smelling bad in public. And McCormick seized on the home bread-making trend by launching four homemade bread recipes on Pinterest that influenced the company’s research and development for new products.
“Brands are looking for anything where they can do an interesting test,” Terrana said.
Direct-to-consumer brands and retailers in particular are doubling down on social by shifting money from their linear and sponsorship budgets and offline-driving campaigns to grow ecommerce sales.
But with conversion rates down by as much as 40% amid the economic fallout, retailers are getting aggressive with social media promotions – and seeing the results.
Ecommerce promotions with hard end dates are doing particularly well, said Noah Freeman, CEO of boutique Facebook and Instagram agency Social Fulcrum. Three clients – a women’s fashion brand, a membership wholesale club and a home furnishing brand – each ran three-day site-wide 10-20% off promotions. All doubled their ecommerce sales within 24 hours.
“Simple promos combined with low CPCs are getting explosive results,” he said.
The DR game
In late March, direct response brands saw audiences erode as the economic realities of the pandemic hit.
But the cost of prospecting new audiences on Facebook and Instagram dropped by as much as 40% as people spent more time browsing online but not necessarily buying. DR brands took the opportunity to pixel new audiences for later use.
Today, prospecting for ecommerce brands in particular is about 20% cheaper than normal levels, and these brands are looking to keep the market share they’ve been able to gain long term. “It’s a matter of making the dollars we have as efficient as we can so when it’s time to ramp back up, we have more flexibility,” said Frances Giordano, group director at The Media Kitchen.
At Social Fulcrum, one DTC client that makes custom printed T-shirts has ramped up Facebook and Instagram spend while they are closed, Freeman said. “If you have relevant product and your competitors are poor, now is a great time to go on the offensive,” he said.
But brands that are well-funded or have a less relevant product during the pandemic are better off pocketing their cash for later. They can instead take this pause to prepare communications to get ahead of the market when the economy reopens.
“If you’re able to enter the marketplace with bigger campaigns and take advantage of efficiencies before spend catches up, that’s a really interesting play,” Terrana said.
Smart brands are approaching social nimbly as the pandemic evolves, testing and learning new strategies every few days as traffic, pricing and consumer habits evolve. Social Fulcrum’s ecommerce and apparel clients, for example, are A/B testing creative daily and extending the end dates of retail promotions on the fly to get more juice out of a sale.
“The wrong strategy is to plan out and execute a four-week ad buy,” Freeman said. “Everyone is in a rapid test mode right now.”