Everyone working in advertising is aware of the seasonal shifts in media prices and competitiveness. Advertisers want to reach consumers in the critical fourth quarter, so the prices are highest around that time of year, before typically falling in early Q1.
Facebook advertising experiences the same peaks and valleys. CPMs and CPCs on the network grew significantly in Q4 of 2011, and Facebook display rates are growing on a year-over-year basis. Advertisers often lay low in the early part of the year, but they should be doing the opposite when it comes to Facebook. The social network offers a unique advantage: It enables brands to invest heavily right now, when rates are low, and build an engaged fan base that they can activate in the fourth quarter without blowing their budget.
Facebook's seasonal price spikes are very similar to search, but the social network differs tremendously because it enables brands to acquire fans early in the buying cycle and retarget them later in the year. Search is based largely on purchase intent, where the opportunity to reach the consumer comes only at the start of their research. Facebook's model lets brands reach consumers earlier in the planning process, driving awareness and brand engagement. By building the initial engagement at a lower price, brands give themselves time to build consumer relationships.