For brands that rely heavily on social media ads, many caught a slight break in the past year as CPMs (the cost per every thousand impressions) dipped across social platforms as brands pulled back on their advertising amid consumer confusion during the pandemic. But that break is now over. Social media prices are rebounding to more normal levels—and agency experts expect social media costs to accelerate along with consumer confidence and the arrival of new commerce ad formats and novel platforms.
StitcherAds—which works with advertisers around their performance marketing campaigns on Facebook, Instagram, Pinterest, and Snapchat—saw a 47% spike in social CPMs beginning in March. Meanwhile, ad agency Aisle Rocket, which has worked with brands like BJ’s grocery stores and weight-loss program Noom on their Facebook ad strategies, found that Facebook advertising prices have gone up as much as 30% as of mid-March, compared to costs at this time last year when the pandemic hit. Facebook CPMs dipped to $5 last March and have now returned to their pre-pandemic levels of $8, the agency says. These studies are specific to the brands that these platforms and agencies serve and do not reflect platform-wide increases.
Agency social strategists point to the recent round of stimulus checks as one reason for the sudden increase in March. With more money in American pockets, there's more reason for brands to show them ads and expect them to work. A Nielsen study out last week found that the majority of Americans (61%) are ready to return to their pre-pandemic behavior.
As result of the stimulus income infusion, brands throughout the country considered "activating additional budgets for performance marketing channels like paid social,” says Bryan Cano, director of strategy at StitcherAds.
Michelle Munera, director of paid social at Deutsch NY, says social spends are “definitely returning to normal,” saying she's particulary seen an uptick for ecommerce and car brands. Munera points to both the stimulus impacting spending as well as “smarter advertising” overall. “Brands had to learn to shift quickly last year, they had to fast forward digital transformations to ensure they could speak to their customers and give them vehicles to buy their products or services,” she says. “Now, one year later, they want to keep the momentum and sales boom they saw while folks were at home looking for things to entertain them.”