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Organic Social Grows In Focus As Social Ad Spend Culled

Ad Spend Down But Not Out

Earlier this month, eMarketer updated its global advertising forecast, writing down spend levels due to the impact of COVID-19.

Jasmine Enberg, eMarketer Senior Analyst 

“In 2020, we expect total media ad spending worldwide will reach $691.7 billion, up by 7.0% from 2019. That’s a decrease from our previous forecast when we expected worldwide ad spending to rise by 7.4% to $712.02 billion this year.”

However, that forecast was completed on March 6, 2020.

Before the world went into lockdown, and significant events like The Olympics got canned.

So to say it is optimistic would not be an understatement, expect a sizeable write-down on eMarketer’s next ad market update.

Although to be fair, in most countries, the bulk of ad spending takes place in the latter part of the year for the holiday season.

Therefore, subject to how COVID-19 is (or is not) contained, ad markets, courtesy of generous government aid, could see a bounce in the latter part of 2020.

Only time will tell.

Ads May Be Down, But Marketing Is Not

While ad spend will inevitably get a big pinch during the first and second quarter of 2020, that does not mean that marketing and communications stop.

On the contrary, according to Socialbakers recent data, it appears that within social media, organisations are shifting capacity and resources to focus on more organic activity, over running ads (see graphic above).

Brands across all regions have consistently posted fewer pieces of paid content in 2020. Not all of this can be attributed to COVID-19, but as the trend continues, it appears that some is related to the tightening of budgets.

A point reinforced by Facebook’s top brass earlier this week.

Alex Schultz, Facebook VP of Analytics, and Jay Parikh, VP of Engineering

“We have received questions about revenue, so want to provide some context here too…

Our business is being adversely affected like so many others around the world. We don’t monetise many of the services where we’re seeing increased engagement, and we’ve seen a weakening in our ads business in countries taking aggressive actions to reduce the spread of COVID-19.”

Socialbakers data is based on 2,376,721 Facebook posts from 40,563 brand profiles across multiple global regions from January 1 – March 15, 2020.

Online Eyeballs At An All-Time High

Social media usage is exploding at the moment, with around 2.5 billion people worldwide put on some sort of lockdown during the pandemic.

Alex Schultz, Facebook VP of Analytics, and Jay Parikh, VP of Engineering

“As the pandemic expands and more people practice physically distancing themselves from one another, this has also meant that many more people are using our apps

Much of the increased traffic is happening on our messaging services, but we’ve also seen more people using our feed and stories products to get updates from their family and friends.”

As organisations grapple with how to communicate on a bootstrap, not only does organic social media activity offer hope, but so does search engine optimisation (SEO).

Within Google Trends, search engine optimisation as a topic is trending up almost 20% year on year worldwide, as organisations look for more cost-effective modes of communication.

Through the next three-to-six months earned and owned media activity will be an absolute priority for the majority of organisations, while paid media sits somewhat in limbo.

It is also during this window that creative minds need to be firing on all cylinders, and relationships become paramount.

Whether it be with customers, channel partners, influencers or other.  

If You Do Have Budget For Ads Tho…

For those running campaigns, or wanting to, there has never probably been a better time.

From a pricing perspective that is.

Naturally, messaging, campaign focus, etc. needs to be managed sensitively and intelligently, but if we assume that’s a given, then the going is very good.

Ad supply is mushrooming, due to social distancing measures, while at the same time ad demand is falling through the floor. Partially due to some sectors playing “wait and see” or others unable to participate due to effectively being “stood down”.

According to Socialbakers, there’s been a decrease in global CPM across the board of all industries analysed. For Brands overall, the most recent figure (US$0.810) is less than half of the previous seven-month high in late November 2019 (US$1.883).

Looking at some specific industries, Telecom experienced the same decrease as most industries in early 2020 and has continued to decline in recent weeks. Electronics mirrors the trends in Brands overall, as its previous seven-month high at the end of November (US$1.524) is more than double its current CPM (US$0.602).

Not surprisingly, the Facebook CPC has also decreased, making the cost to advertise much lower for nearly every industry that Socialbakers analysed.

Hence, if you can rustle together some ad cheddar, good value opportunities abound.

And not just within social platforms, but the ad market more broadly across news, radio and TV. All are experiencing surging attention due to COVID-19.

Warren Buffett once said that as an investor, it is wise to be Fearful when others are greedy and greedy when others are fearful.” A similar principle could be equally applied to buying ads.

On the other hand, if paid campaigns are not an option, do not forget that marketing and advertising are not the same thing…

Therefore, just because the latter gets clipped, does not mean the former has to stop.

Learn with SMK W/C 4th July 2022

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