how the turbulence of 2020 affected facebook ad prices

How The Turbulence of 2020 Affected Facebook Ad Prices

how the turbulence of 2020 affected facebook ad prices
how the turbulence of 2020 affected facebook ad prices 1

After a collapse in Facebook ad prices as the pandemic first took hold this spring, the social network’s ad costs remained relatively strong through a summer of social unrest, an advertiser boycott of the platform and a contentious election season in which the tech giant played a prominent role.

That’s according to a new report from growth marketing agency Aisle Rocket, which examined how the tumultuous events of 2020 affected ad pricing for its clients. The white paper concluded that beyond an initial commercial activity standstill at the onset of the pandemic, Facebook ad metrics showed a relative resilience in the face of current events that could have threatened its bottom line.

“We really felt that there was a lot of missing information out there, which was that no one was really publishing any data on Facebook ad pricing,” said Noah Freeman, head of product at Aisle Rocket. “Once we started to lay it out, it was all really correlated—almost every client would go up together, almost every client would go down together. And what we thought was really interesting was how much world events were showing up.”

Freeman said that before this year, across-the-board shifts in Facebook ad prices could usually be traced back to changes in the Facebook algorithm or holiday or summer seasonality. This year was the first that the agency was able to line changes up with broader world events.

“Most years, world events don’t show up in ad data super clearly,” Freeman said. “But world events are sort of all that matters this year. There’s not a lot of Facebook-specific news except for the boycott.”

The agency was able to plot changes in pricing to three broad stages. From March to May, Facebook ad metrics cratered as brands ramped down advertising budgets in the face of initial Covid-19 uncertainty. Then, as a global protest movement took hold from June to July, Facebook advertisers began to shift the focus of creative to show solidarity with the social movements, and spending rebounded.

Finally, several major advertisers joined a boycott in July and August to pressure Facebook into cracking down on hate speech and misinformation on the platform. But the actions had little overall impact on Facebook’s ad pricing in that period, according to the report.

“What you can see is that if the boycott had been effective, then you should have seen a really low ad pricing in July and then a big jump in August when it ended and you didn’t see that at all,” Freeman said. “You saw a big drop in the first week of July, but you normally see that because the Fourth of July. But then we didn’t see that the jump up in August that would have meant the boycott have been working.”

While many brands returned to Facebook after the the monthlong boycott was over, some continued to hold out even beyond the end date. Uniliver, for instance, only just announced that it would return to the platform in January after a six-month boycott.

Emarketer analyst Debra Aho Williamson also confirmed that Facebook has now rebounded from any damage that the advertising boycott might have caused.

“Facebook has rebounded nicely from both the early-pandemic advertiser pullout, when marketers pulled ads across all media to redo messaging or conserve funds, and from the July ad boycott,” Williamson said in an email. “Despite its challenges with election turmoil and content moderation, it remains a go-to for advertisers seeking to engage a broad base of consumers.”