Brands lower their ad spend on Facebook due to corona virus
In view of the current economic situation, demand for paid ads on Facebook is falling. Socialbakers examined how advertising expenditure, CPC (cost-per-click) and the engagement rate of companies on Facebook developed in the first quarter of 2020.
The study shows that the volume of ads and the CPC have fallen. Companies in all regions are now focusing more on organic content than before.
In Western Europe, the CPC was around USD 0.43 in December. By mid-March, the CPC had more than halved to USD 0.20. The situation is similar in North America: in December 2019, the CPC was around USD 0.64; by mid-March, this had almost halved to USD 0.32.
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The negative CPC trend in Western Europe.
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The negative CPC trend in North America.
Advertising expenditure in East Asia has been rising again since March with the resumption of business activity, while in regions such as Western Europe, Southern Europe and Southeast Asia, advertising expenditure has been falling since the beginning of March.
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North America recorded the sharpest decline in advertising expenditure: Advertising expenditure fell by almost 50% between December 2019 and mid-March 2020.
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Due to social distancing, it is expected that customer interactions with brand profiles on social media will increase in the coming weeks. So far, however, overall engagement has been similar.
"The data reflects what we are currently hearing more and more from companies. They are reducing their advertising budgets due to the current uncertain economic situation," explains Socialbakers CEO Yuval Ben-Itzhak. "However, we believe that in the current situation, customers want to hear from the brands they follow more than ever. With regard to social distancing, companies should be aware that their target group is spending more time than ever in the digital world in order to stay connected, entertained and informed. The current situation therefore also presents companies with opportunities, meaning that cuts to advertising budgets should also be questioned."
* The research data of the social media marketing platform Socialbakers based on 2,376,721 Facebook posts from 40,563 brand profiles from various regions worldwide from January 1 to March 15.
