Posted In: Digital by
Connor,
August 2, 2024
Fran Haigh, Senior Account Executive
If your LinkedIn feed is anything like mine, the cost of advertising on Meta has been a hot topic of conversation in the paid social world in the last year. Many advertisers are expressing concerns over rising expenses as pressure on performance rises. Factors such as increasing competition, the cost of living, changes to Meta’s algorithms, and seasonal trends have all been pinned as reasons for this perceived escalation in costs. However, a recent analysis by the digi geeks at Boutique paints a very different picture. In short, we can actually see CPCs decreasing and CTRs increasing. So, what is driving this positive shift?
With over 10 million active advertisers competing against one another, it’s no surprise that the costs of advertising on Meta is increasing. One of the main factors for rising costs within Meta is the external economic factors that heavily influence the buying behaviour of consumers which impacts paid social performance.
Meta is notoriously known for constantly changing and evolving to keep up with new trends and user behaviours – every paid social expert out there will tell you how many times Meta Business Suite changes in one week! Recent shifts in Meta’s algorithm adds another layer of complexity for advertisers. Lastly, seasonal trends can have a big impact on costs for Meta. It is well known within the advertising space that Black Friday / Christmas sales can be the most competitive time and therefore expensive time to advertise.
Despite these challenges, our data tells a different story. We analysed data across our ad accounts from August 2022 – July 2024. The data suggests that we are seeing a consistent downward trend of CPCs YoY. Simultaneously, CTRs have shown a marked improvement with the data showing that users are engaging with the ads more than ever before. But what is causing this positive shift?
One valid explanation for these improved CPCs is the big focus and attention towards creatives in the last year. According to Meta, 30 pieces of content are consumed in 2 minutes, which means now more than ever before, advertisers must focus on producing engaging content that resonates with their target audiences. This is the part where we give an honorary mention to Low-fi (or otherwise known as UGC), a marketers current best friend, where the authenticity and trust of low-fi content can help increase engagement with younger audiences.The best bit about Low-fi? Is you don’t need an Oscar in cinematography to create your own (Thanks TikTok <3).
Meta’s introduction of Advantage+ options has been a game-changer for advertisers. This includes the likes of Advantage+ Shopping, Placements and Audiences. These are designed to leverage machine learning to determine the best placement for each ad. We can now maximise their reach and efficiency, leading to lower CPCs and higher CTRs. Advantage+ placements take the guesswork out of the equation, ensuring that ads are shown to the right people at the right time and goes beyond your audience personas.
In a time where users are taking more control of their data but still demanding personalised and timely ads, Advantage+ is your answer to combat these challenges. Improvements in campaign and audience targeting have played a crucial role in this. Meta’s advanced targeting options allow us to precisely reach specific audience segments with customised messaging and creatives. By focusing on the right audiences, we can minimise wasted ad spend and enhance the relevance of our ads resulting in lower CPCs and higher CTRs
In conclusion, advertising on paid social as a whole does now require more creative and strategic thinking to be able to get the results you need. It requires advertisers to have their fingers on the pulse at all times and ensure that they are implementing new technologies and trends to keep up with the evolving landscape.
Through the adoption of better creatives, the implementation of Advantage+ technologies, and advanced campaign and audience strategies, we are actually seeing consistent improvements to CPCs and CTRs. You can see how we do this with our case studies.
This highlights the importance of staying agile and leveraging the latest tools that Meta throws at you. At the end of the day, Meta wants to help you get the most out of your advertisements, so put a little trust in their recommendations (unless they are telling you to spend 50 million pounds more a day).Does your ad account not reflect the above? Come talk to us about how we can help get you back on track.
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