Facebook Changes and Their Impact on Paid Media

sourced from: http://www.dsamedia.ca/facebook-changes-and-their-impact-on-paid-media/

If you’re in the digital marketing space then chances are you’ve heard a lot of buzz about Facebook recently. Most of the discussion has been about recent updates and their impact on organic reach that’s left content producers scrambling, but what about advertising?

Here’s a comprehensive post from Polar that takes a deep dive and comes up with some interesting conclusions, including a prediction that the cost to advertise on Facebook could go up by as much as 79% in 2018.

I have assumed modest user growth (in line with historical trends), declines in time spent from 10% to 20% over the next year and static ad density. Based on these assumptions, the price of advertising on Facebook could go up by 25% within 3 months, 48% within 6 months and 79% within 12 months.

That might come as a shock, although many of us observed rising costs throughout 2017. We’ve seen some reports showing as high as 171% since January, but anecdotally, most of DSA’s clients have seen more modest increases in the 25-30% range, with optimizing towards impressions rather than clicks a possible factor. And with Nielsen’s recent findings on the platform, it looks like Facebook is finally telling people what comScore has been saying since 2009 — optimizing to clickers is generally a waste of time and there’s little to no correlation between CTR and brand or conversion objectives. Where have we heard that before?.

So where do we go from here? Planners will need to rethink Facebook as a cheap, high-reaching foundational layer in their strategies. It’s quickly becoming not so cheap, and on flat budgets, a tougher look at targeting and custom audiences is needed to build and maintain any frequency. And as the cost of image and video ads in a cluttered newsfeed goes up, formats like YouTube’s bumper become an even more appealing way to connect with audiences on their terms (quickly and effectively).

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