Facebook CPMs Are Shooting Back Up

Facebook CPMs on the rise

What goes down must go up.

Now that the economy is slowly beginning to reopen, Facebook CPMs have bounced back and then some after dropping precipitously in March due to the pandemic.

When COVID-19 hit, CPMs on Facebook dipped by as much as 50% in some cases, according to eMarketer. CPMs on social platforms were down by between 15% and 30% on average across the board.

But by the end of May, it was a completely different story. Facebook CPMs shot up by between 20% and 50%, depending on the app, said Eric Seufert, a media strategist, former Rovio exec and editor of Mobile Dev Memo.

Seufert saw the trend play out for a number of his clients across gaming, health and fitness, messaging and travel. Ad pricing started to normalize at the very end of the month, with CPMs closer to pre-COVID-19 levels, but still elevated by about 10%, he said.

GroupM has also seen demand increase in markets and CPMs begin to revert to baseline pricing, said Kieley Taylor, global VP of social at GroupM, with the caveat that pricing invariably fluctuates depending on the advertiser, category and audience.

Kunal Gupta, CEO and founder of Polar, attributes the uptick in Facebook CPMs from their March lows to increased competition in the auction as DTC brands, ecommerce retailers and performance advertisers in general getting “back into consumer acquisition as the highly sensitive period of marketing during a pandemic is now behind us.”

But the situation is still volatile. Christopher Mohs, a digital strategist and founder of digital marketing agency Cora+Krist, saw ad prices increase 200% between May 28 and May 29. Over Memorial Day weekend, one client’s CPA costs rose by more than 600%.

“We see this as a direct correlation to businesses starting up again and states reopening,” Mohs said.

Agencies that hit pause on campaigns for the first uncertain months of the pandemic are now trying to make up for lost spend in the categories where it makes sense to do so, Gupta said.

But another dynamic at play is that Facebook apps got a big initial bump in engagement at the start of the pandemic when users hunkered down in their homes. As the weather gets nicer, though, people are starting to spend more time outside and less time indoors tied to their screens.

What’s happening now with ad pricing is basically the reverse of what happened at the start of the COVID-19 reaction, Seufert said.

“In the earlier case, CPMs decreased as the audience size was increasing, because more people were using Facebook,” he said. “Now, CPMs have increased because audience sizes are decreasing.”

But prices still aren’t higher than before the pandemic started, said Shamanth Rao, CEO of mobile user acquisition firm RocketShip HQ. “The COVID traffic was a bonus, and like all good things, it came to an end,” he said.

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1 Comment

  1. I surveyed a few of our ecommerce clients today and saw no indication of rising CPMs. Sometimes rising CPMs can also be caused by poor set up by inexperienced media buyers. Our teams are 100% Facebook Blueprint certified which probably makes a difference.

    Reply

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