During the Holiday Shopping Weekend, Meta Ad Prices Returned to Earth

In an economy filled with dark clouds, marketers got some light relief during the busy Black Friday and Cyber Monday weekend: In general, it was cheaper to advertise on Meta compared with the year before, signaling somewhat a return to normalcy, while ad rates on TikTok again grew, albeit from a smaller base. As measured by costs per thousand impressions (CPMs), the cost to advertise on Facebook and Instagram was down 29% from 2021 for the period between Thanksgiving and Sunday, Nov. 27, at performing marketing agency Tinuiti. Another data point found that the median CPM on Facebook each day between Thanksgiving and Cyber Monday averaged 16% lower than last year, according to data analytics firm Varos, which tracked ad-spend of 2,600 direct-to-consumer and software-as-a-service companies. “Q4 2021 is the outlier. Advertisers were going crazy,” said Avi Ben-Zvi, vp of paid social at Tinuiti. “We’re in a very different place. The digital landscape is different.” Despite the recessionary headlines, a return toward normalcy was a theme during the busiest shopping weekend of the year. U.S. shoppers spent $9.12 billion online on Black Friday this year, according to Adobe Analytics, a 2.3% increase year over year. It also marked a reversal from 2021’s anomaly, when online spend on Black Friday decreased for the first time. But advertising spend this past weekend also reflected changes in the media mix. The cost to advertise on TikTok, whose U.S. net ad revenues are expected to grow 184% in 2022 per Insider Intelligence, increased from last year. Among Tinuiti clients, TikTok CPMs increased 13% to $6.36 in November. (Meta's CPM over the same period was still 66% greater.) Varos found that the median TikTok CPM on the five days of Black Friday weekend in 2022 averaged 15% more expensive than in 2021. Black Friday Bounces Back With Record-Breaking Online Sales Making the most of Meta with Reels Meta’s lower CPMs during Black Friday weekend are reflective of a broader trend throughout 2022 when CPMs declined from 2021 highs, said Ben-Zvi. Meta has had a turbulent year. The company suffered its first revenue decline this year amid competition from TikTok and Apple’s privacy changes undermining the effectiveness of its ad tech. Marketers have adapted their strategies accordingly. Daniel Pearson, CEO of mobile app and ecommerce-focused agency Bamboo, said his clients have been aggressively adopting new placements like Reels, Meta’s short-form video TikTok clone. Pearson said this strategy partially explains why costs per click on Meta were down 16% among Bamboo clients advertising during Black Friday weekend. “[Reels] are new and less adopted compared to in-feed placements,” he said, meaning pricing is less competitive. Pearson found that CPMs on Meta were actually up 5.8% for his clients during the period, a difference he interpreted as essentially flat. Critical to Tinuiti’s Black Friday period strategy has been Meta Advantage+ Shopping, a new tool that the company released widely earlier this month, Ben-Zvi said. Instead of building custom audiences to target through small, individualized campaigns, brands who use Advantage+ Shopping run a larger campaign reaching a broader swath of audiences and letting Meta’s machine learning find the right customers, helping to mitigate the impact of Apple’s privacy changes on targeting. Ben-Zvi said that the tool led to a better return on ad spend and customer acquisition compared to the fourth quarter of 2021, and for one brand, led to 50% more conversions and 77% cheaper cost per acquisition compared with their standard campaign. “The toughest part is we don’t know exactly what’s working or what’s not working,” Ben-Zvi said. “It’s putting trust in the algorithm.”