Where Are We Now?
Of course, you already know. We are tightly in the grasp of a global pandemic which is on an unprecedented scale. It’s real. It’s scary. And it’s having an impact on all of us. I’ve tried to stop looking at the numbers now, but I think it’s fair to say that we probably haven’t seen the worst yet and this is going to be a long-term recovery. We need to support each other and businesses using online tools more than ever before whilst we all #StayAtHome to protect the NHS and our loved ones.
Sadly, but understandably, many businesses have had to close their doors on government advice. However many online businesses are managing to stay open and operate safely in order to keep staff employed, essential services & supplies running and to help stop the economy going into free-fall.
So what does this all mean for those online businesses who advertise on Facebook?
A Double Decrease To CPMs
The pandemic has caused two distinct impacts to Facebook ads.
Firstly, the ad auction is much less competitive. Businesses in the hospitality, travel, events and in-person sectors have understandably paused their advertising campaigns as they are unable to deliver their products or services. This has caused a significant drop in CPMs (cost per thousand impressions) as advertisers face less competition when bidding on audiences.
Secondly, as we all #StayAtHome, browsing of social media platforms has increased by 70% on Facebook, Instagram & Whatsapp. This causes an increase in ad placement inventory as there are more slots on users social feeds to fill with ads. This increase in placements further decreases the CPM as it makes the auction even less competitive as advertisers do not have to compete for placements.
This double decrease in CPM’s means businesses who are still advertising can reach more people for less, which in turn is having a positive impact on CPA (cost per acquisition) and ROAS (return on ad spend). Meaning their advertising is much more effective.
I have recently experienced the effects of these impacts myself as my average clients CPMs have reduced by 30-40%. Astonishingly, one of my campaigns reached a new CPM low of just £0.16, which means I have almost delivered 1 million impressions for the total cost of £154.
What Should You Sell?
It’s simple. Anything that can be used at home which makes people feel entertained, comfortable, relaxed or occupied. For example, the sale of games, at-home exercise equipment and online-based services are through the roof.
So focus on your product or service offering which best suits the #StayAtHome situation and if you don’t have any which would suit then change your offering or create a new one entirely. For example, restaurants that have never offered delivery services before have kept their kitchens open and listed themselves on Deliveroo or UberEats, or created their own delivery service entirely.
Although many businesses have been forced to close and demand has dropped, there is still plenty of opportunity in the market to sell something, people will always need things.
What About Your Image?
I’ve recently seen criticism on LinkedIn and Twitter of companies continuing to market and sell their products. They are branded as ‘cold’, ‘selfish’ and just ‘thinking about the money’ when many people are ‘losing their jobs’. However, the argument is completely backwards, if a company can continue to operate in a safe and sensible way then they are ensuring that staff keep their jobs, products and services are delivered to people who need them and are holding up the economy from a full free-fall. If every single business stopped trading today then we would witness the complete collapse of the economy, society, law & order and the world that we know.
Luckily, I’m not alone in this as 92% of people believe brands should continue to advertise, but it goes without saying… be sensitive. Don’t exploit the situation and don’t run headlines like “Infectious Deals” – a car sales company actually did this recently and they received the backlash they rightfully deserved.
$100 Million Gift From Facebook
Facebook announced last week that it will be offering $100 million in grants to as many as 30,000 businesses across all of the countries that they operate (nearly the whole world). It is humbling to see Facebook offering a helping hand in this situation and $100 million is certainly no small sum. We don’t know much more about the scheme just yet but apparently businesses will be able to apply in the coming weeks.
With that said, I suspect Facebook will be reviewing applications individually and offering support to those that need it the most. I’m thinking mostly small independent businesses who are trying to have a positive impact on the world. From Facebook’s wording I suspect, large profitable companies will be instantly dismissed. Also, all-in-all 30,000 businesses globally, isn’t that many when considering there is 6 million business in the UK alone. So, if you’re a business applying for these grants, it wouldn’t be sensible to rely on it as a lifeline, you will most likely have to seek support from other sources.