A recent eMarketer report revealed how the COVID-19 pandemic would affect social media advertising in the second quarter of the year.
For the past months, the coronavirus pandemic has forced governments across the globe to impose country-wide quarantine and lockdowns. Businesses were shut down, and people were asked to work from their homes or were laid off.
As with other industries, advertising, mainly social media ads, is also suffering from the economic impact of COVID-19. The following are some of the valuable insights shared by eMarketer‘s Principal Analyst, Debra Aho Williamson, in her report.
eMarketer Report: Social Media Advertising in Q2 and Beyond
According to Williamson, Facebook‘s CPM ad pricing fell by around 50 percent last month. Meanwhile, Snapchat reported more substantial revenues in Q1 of 2020, but its year-over-year growth in March declined by less than half of its rate in January and February.
Meaning, despite the high engagement social media are experiencing these days, marketers are still pulling back on their ad spendings.
However, some marketers are continuing to advertise despite the health crisis. Williamson explained that the lower ad prices are still attracting some companies.
She said:
“Businesses in industries such as technology, telecom, and consumer packaged goods (CPG) continued to spend to reach consumers whose daily activities shifted once they started spending more time at home.”
In Williamson’s eMarketer report, she projected that social media CPMs (cost per mile) would still suffer this quarter. What’s worst is that it might continue in the following months, depending on how fast the U.S. economy would recover.
The eMarketer analyst also noted that advertisers are now focusing more on brand messaging than performance-oriented advertising. Also, Williamson expects a decline in social ad spendings in April. But, the situation could improve in May and June.
In general, eMarketer predicts that social ad budgets would decline by up to 28 percent between March and June.
For more details, you may get a copy of the full report here.
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