Facebook CPMs and CTRs on the Rise

I looked at my phone for what felt like the 20th time of the night. It’s 3 a.m. I’m wide awake and stressed.

There’s plenty that could keep a 26-year-old up late at night. The usual thoughts run through my mind: “Did I lock the back door? Why are some of my clients’ social CPMs so high? Why am I spending more to achieve the same amount of impressions as last year? Did I leave the stove on?”

OK, so maybe some of those are a little more specific. But that doesn’t mean social marketers across the country who rely on Facebook as their main ad buying arena aren’t wondering the exact same thing.

A few weeks ago, AdStage released its own study on Facebook ad impressions. Its findings are pretty extraordinary, and are certain to explain why you’ve been wracking your brain trying to make sense of those perplexing results.

AdStage analyzed 8.8 billion Facebook ad impressions in 2017 based off its own customer data. During the first six months of the year, the average CPM went from $4.12 to $11.17 (a 171% increase). In that same time, cost-per-click increased from $0.42 to $0.99 (up 136%).

For more detail on the study, social media marketers should read Ad Stage’s head of acquisition JD Prater’s blog post on the results. The amount of detail Prater goes into when explaining this phenomenon is valuable to any agency dealing with the same issues.

Overall, if ad impressions on Facebook were about flat in 2017, according to AdStage, then what changed?

Facebook’s number of advertisers exploded in 2017 – up to five million back in April, according to the social network’s own reporting. That’s an additional two million from last year. They’re also spending much more in an effort to bolster their results.

AdStage notes that advertisers only make up about 8% of the 65 million businesses on the network, meaning a slowdown in growth isn’t in the cards. Be prepared to spend even more in 2018 if you don’t want your impressions to suffer.

Additionally, Facebook may be reaching its maximum ad load faster than expected. During the company’s 2016 Q2 earnings call, Facebook CFO David Wehner said he expected the ad load’s growth over the following 12 months to be a “significant factor driving revenue growth after mid-2017.”

One year later, the company showed only a 19% paid ad impression growth – down from 32% during 2017 Q1, and 49% in 2016 Q4. Facebook will still get paid, however, as ad prices increase with user growth and the viability of Instagram as a digital ad space.

Keep in mind, according to Prater, that Q4 findings – traditionally Facebook’s most expensive time – are expected to be interesting as well.

So what does all this mean for advertisers who once made their living recommending Facebook as the best place for brands to live? Be prepared to go back to your teams with higher dollar asks.

Facebook ultimately controls the space at this point, and with so many other competing brands willing to shell out the extra bucks to have a presence on the mammoth social platform, your business will have to keep up.

In the meantime, go get some sleep. I know I need it.