Facebook CPMs Will Be Higher Than Ever This Holiday Season

Too bad there isn’t a Black Friday deal on Facebook inventory – because it’s getting pricey. Coming into Thanksgiving week, Facebook CPMs were up by 30%.

Too bad there isn’t a Black Friday deal on Facebook inventory – because it’s getting pricey.

Following a massive 38% spike in CPMs on Facebook between September and the week before the election, prices dipped back to more normal levels during the first week in November before climbing back up again, according to digital agency Aisle Rocket.

Coming into Thanksgiving week, Facebook CPMs were up by 30%, and Aisle Rocket expects to see the highest CPMs in history on the platform during the last two weeks of November. Prices will likely remain elevated until roughly Dec. 20 before coming back down to earth.

There are three primary reasons for the trend, said Noah Freeman, head of product at Aisle Rocket.

One, Facebook always sets a new record for most expensive CPMs every December. Two, the election triggered higher-than-normal pricing during the start of the holiday season. And, three, the pandemic is causing a massive uptick in online shopping.

Ecommerce grew an estimated 37.1% year over year in the third quarter, according to the US Census Bureau, and eMarketer predicts that US ecommerce sales will grow 35.8% this holiday season, the highest growth rate by far since eMarketer started tracking retail sales in 2008.

Beyond promoting the bejesus out of their holiday-related discounts and sales, retailers are specifically pushing traffic to their sites, rather than their physical stores, said Mediaocean CMO Aaron Goldman. There’s also a greater number of overall retailers advertising on Facebook, which is contributing to these higher rates, he said.

And, despite lockdowns resuming in numerous cities, many marketers are jumping back into advertising in order to capitalize on renewed optimism to do with the recent vaccine news, Goldman said.

Facebook is, of course, a massive beneficiary.

“These advertisers are reentering, but favoring digital channels, such as Facebook, as there is more flexibility to pause or adjust as needed,” Goldman said. “Also, Facebook allows for personalization, which is needed to adjust messaging based on user context and the varying impacts of the pandemic.”

In order to try and mitigate increases to CPMs on Facebook during the holidays, Frances Giordano, group director of Media Kitchen, advises focusing on broader audiences where possible.

“With this strategy, we have seen minimal impact on CPMs across prospecting tactics,” she said. “However, we have seen instances of 30% to 40% increases in niche remarketing audiences across a variety of clients.”

But there’s also another way to attain more affordable CPMs, and that’s to just … wait.

As always, the cheapest ad pricing for the entire year on Facebook will likely happen between Dec. 26 and Jan. 15, Freeman said.

That’s when people are at home messing around on their phones generating ad inventory from their sofas while very few advertisers outside of the weight loss and exercise equipment categories are active on the platform.

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