Socialbakers Sees Facebook Ad Spend Drop in North America, Europe, Southeast Asia

Ad spending on Facebook is following a similar path to that of the coronavirus pandemic, according to social media marketing platform Socialbakers, showing drops in March in regions where the situation became more serious—North America, the western and southern parts of Europe and Southeast Asia—but signs of a rebound in East Asia, where businesses are beginning to reopen. Socialbakers said in a report issued this week that ad spend on Facebook in North America fell nearly 50% between December 2019 and the middle of last month, while cost per click in Western Europe took a similar hit over that time period, dropping to $0.20 from $0.43. The company wrote, “This decline in ad cost presents an opportunity for business-to-business brands to drive awareness and thought leadership, while business-to-consumer brands can use this opportunity to acquire traffic at a lower cost.” Meanwhile, in East Asia, where business is beginning its return to normalcy, Socialbakers found that CPC on Facebook rose 25.6% in March. In a report it released in late March, Socialbakers said brands across all regions have been posting more organic content since the beginning of 2020, speculating that many companies were freezing their advertising budgets due to the economic uncertainty caused by the pandemic. In that report, the company analyzed 2,376,721 Facebook posts from 40,563 brand profiles across multiple global regions from Jan. 1 through March 15 and found that the number of paid ads was declining globally, as was CPC, while the amount of organic content was on the upswing. Socialbakers CEO Yuval Ben-Itzhak said this week, “Because of uncertainty about the economic environment and the increase in users’ engagement with digital content, brands are increasing their use of organic content and decreasing their ad spend. Brands should be future-proofing their business by embracing digital transformation. If this time is showing us anything, it’s that digital channels are where customer engagement is happening, and businesses that neglect them do so at their peril.” Socialbakers said this week that posts mentioning the coronavirus have been far more prevalent on Facebook than on Instagram, adding that the industry seeing the most interactions with posts was airlines, as travelers took to social media to resolve issues. Posts from brand accounts related to what they were doing to support communities and employees during the Covid-19 crisis saw a dramatic increase in “love” reactions, Socialbakers said, adding, “This suggests that during these trying and emotional times, people are appreciative of the brands they follow and the actions they are taking to provide help and assistance.” Not surprisingly, social distancing has led to people spending more time online, which, Socialbakers pointed out, gives them more opportunity to see content from brands. The company added that online activity by fans of brand pages in the Central European Time zone was up 16.1% compared with the last full week of February. Ben-Itzhak concluded, “In times of crisis, brands can’t not communicate with their audience. Now, more than ever, customers want to hear from the brands they follow, so cutting back completely on social media investment could prove to be a misguided approach. Brand marketers need to be mindful that, faced with the prospect of social distancing and more time at home, their audiences will be looking to the digital world to keep them feeling connected, updated and entertained. All in all, marketers looking to engage their audience today can do so by taking advantage of cheaper ads, with smart organic strategies, or a winning combination of both.”