CPMs dropped 10-20% due to the recent protests, as civil unrest grows – our Strategic Recommendations on Facebook During Uncertain Times (Week 12)

Jun 10, 2020 | Industry News

As the nation faces a difficult moment together, our thoughts are with those seeking to better society through peaceful demonstrations. Recent disruption and social unrest has affected every industry, including ours, and we hope that all of you are healthy and well.

With the recent events, we have seen an increase of Facebook usage but with less activity in ecommerce. It’s the subject of our eight edition of “Pricing Trends and Strategic Recommendations on Facebook During Uncertain Times”

Executive Summary (Full Details Below)

Due to the recent social unrest, we have seen many of our key metrics decrease. Many people are at home and using Facebook to follow current events. Even though we have seen an uptick in activity on Facebook, we have noticed that users are not engaging with ecommerce. We have put together a few guidelines for you to use during this volatile moment: 

Summary of Changes

  • CPMs dropped 10-20% due to the recent protests, as civil unrest grows.
  • CTRs dropped this week, showing that people are less interested in interacting with ads.
  • CPCs have become bouncy, with some campaigns higher cost, and some now lower cost.
  • Conversion rates have continued to drop, this time due to the recent unrest.
  • Cost per Purchase has been increasing. Prospecting & retention are seeing sharp cost increases so far in May.

What Does it Mean?

  • Right now people are using social media aggressively, but not interested in ecommerce. This is shown in a number of different statistics:
    • CPMs are down because Facebook usage is up.
    • CTRs are down because customers are reading news on Facebook but not making purchases.
    • Onsite conversions are down.

What Will Happen Next? 

  • Assuming the situation stabilizes, we should return to the same performance we saw in mid-May.
  • We expect the drop in CPMs to reverse.
  • We expect CTRs & Conversion rates to climb back to where they were a few weeks ago.

Strategies to Adapt: 

  • Decide on how you want to handle the specific negative sentiment around Facebook.
    • Twitter decided to start flagging some of President Trump’s tweets as “check the facts” or “do not incite violence.” 
    • Facebook did not follow suit to tag the president’s posts. 
    • Many people, especially from minority communities, called for users to boycott Facebook early last week.
    • Our team has put together a chart in this newsletter on your options on how to proceed in this tumultuous time.
  • Be very conservative around the creative.
    • We suggest you go through every single piece of creative you are using, and ask yourself “is there any way this could get interpreted by anyone in a negative light, especially around the current social unrest?”
    • If anything is on the edge, you should pause it for now.
  • Read the comments on your ads. One way to realize you have offensive content is to read your ad comments.
  • If any ad comments alert you to issues, adjust or pause your creative.
  • You can also choose to respond to your commenters or to hide their comments. Be careful of internet trolls trying to incite a reaction.  We typically suggest learning from the comments, and then hiding them, rather than replying.
  • Be reactive, don’t be proactive.
    • React day-to-day to how your ads are performing 
    • The past isn’t like today, so analyze historical data less, but analyze current data heavily.
    • Just react to what ads are working.

Detail: What is ad performance like right now? 

Cost Per 1k Impressions (CPM):

Recent civil unrest has created an increase in Facebook usage, and cuts in ad spend, leading to drops in CPMs.

  • What are we seeing?
    • CPMs dropped 40% in the early days of the crisis.
    • But starting ~3/22, CPM have been rising 5% per week.
    • Starting 5/25 as civil unrest grew, ad prices start to drop 10-20%

Click-Through Rate (CTR):

As unrest started in late May, ad click-through rates dropped as well.

  • What are we seeing?
    • As unrest began, click-through rates began to drop.

Cost Per Click (CPC):

With CPMs and CTRs both dropping, the impact of the civil unrest on CPCs has been mixed.

  • What are we seeing?
    • The drop in CPMs, combined with drops in CTRs, has created a bouncy CPCs, with some campaigns higher cost, and some now lower cost.

On-Site Conversion: 

Conversion rates, which had already been dropping as retail reopened, took a noticeable further move downward during the recent unrest.

  • What are we seeing?
    • As civil unrest begins, on-site conversion rates start to drop.
    • This impact is largest in everyone’s best customer segments–retention & retargeting.

Cost per Purchase: 

With rising CPC bouncy and conversion rates falling, we have seen a meaningful increase in cost per conversion since the unrest began.

  • What are we seeing?
    • Prospecting & retention are seeing sharp cost increases so far in May.
    • Retention costs are rising from a very low base.

How can we improve performance?

Strategies to Adapt: 

Tip #1: Decide on how you want to handle the specific negative sentiment around Facebook.

  • Twitter decided to start flagging some of President Trump’s tweets as “check the facts” or “do not incite violence.” Facebook did not follow suit to tag the president’s posts.
  • Many people, especially from minority communities, called for users to boycott Facebook earlier this week.
  • Our team has put together a few options for you to consider on how to proceed.
ProCon
Keep going as business as usualRevenue maximizingRisk of being seen as insensitive (though this blowback has not actually happened to any of our clients)
Keep ads on, but turn off organic Facebook postsShould impact revenue minimally
Shutting off organic can show solidarity with the Facebook blackout
Few
Stop organic posts & turn off ads.Minimize negative PR riskLose Facebook revenue

Tip #2: Be very conservative around the creative.

  • We suggest you go through every single piece of creative you are using, and ask yourself “is there any way this could get interpreted by anyone in a negative light, especially around the current social unrest?”
  • If anything is on the edge, you should pause it for now.

Tip #3: Read the comments on your ads.

  • One way to realize you have offensive content is to read your ad comments.
  • If any ad comments alert you to issues, adjust or pause your creative.
  • You can also choose to respond to your commenters or to hide their comments.  Beware of internet trolls trying to incite a reaction. We typically suggest learning from the comments, and then hiding them, rather than replying.

Tip #4: Be reactive, don’t be proactive

In normal times, we try to:But right now, its best to 
Proactively plan mediaReact day to day to how your ads are performing
Heavily analyze the past to predict the futureThe past isn’t like today, so analyze historical data less, but analyze current data heavily.
Have long term creative plansJust react to what ads are working

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