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Coronavirus Overview
The global outbreak of the coronavirus (COVID-19) has shocked us all. Virtually every human on the planet is impacted and we are now banded together in a common purpose. Like any useful tools, Facebook Ads and Instagram ads have a role to play in helping us survive and thrive again as people and as businesses. Here is an early overview of what we’re seeing as the current “new normal” for paid social during the outbreak.
Lower CPMs
Unfortunately, the virus is affecting the majority of the economy. The hospitality, travel, retail, live entertainment, and event industries are most obviously affected but many ecommerce companies are seeing their supply chains interrupted too. This is forcing many businesses to temporarily pause ads.
Increase in Screen Time Equals More Eyes on Digital Ads
Also, due to the number of people suddenly having more free time on their hands, or just looking for a distraction, the amount of time spent on Facebook and Instagram is going up. Early estimates are seeing time spent on the platform rising between 29-53% in regions that were first hit by the crisis.
We are seeing ad inventory rise while competition among advertisers falls. Facebook Ads function as a basic marketplace, thus we are seeing dramatically lower costs to get ads in front of people, and low CPMs mean opportunities for any businesses that continue to service their community and maintain operations in these challenging times.
In our internal reporting, CPMs on Facebook ads have fallen 37.2% since Coronavirus stay-at-home orders started to roll out across the US. (This is across a variety of consumer facing accounts since March 11 compared to the previous period, or about 40 days of data). Some advertisers are seeing 50%+ CPM dips in their campaigns.
Many businesses are also seeing greatly impacted conversion rates, so we usually rely on cost-per-conversion (CPA) metrics and / or ROAS so the full picture of CPMs, CPCs, and conversions rates can be integrated. Overall, CPAs are also down, but that greatly depends on the industry and the conversion rates.
Coronavirus Impacts Vary by Industry
Ads Dark for Some, Opportunity for Others
Events-based businesses such as sports and conferences rightfully paused their ads until they receive more information during the quickly evolving pandemic. However, certain verticals are naturally well-positioned to continue to serve their customers, such as:
- Healthcare providers, especially telemedicine
- Insurance
- Finance with strong digital components
- Ecommerce
- Delivery, especially food and grocery
Sadly, other industries and people are struggling hard, for reasons entirely out of their control. We should all be creative in any way we can support them:
- In-person conferences
- People who work in restaurants and bars
- Uber and Lyft drivers and other “gig economy” workers
- Full-service bars and restaurants
- Brick and mortar retail, especially local SMBs
Adjusting your Product Catalog for Covid-19
Many businesses with broad product catalogs can create a mix of products particularly suited to these challenging and unique times. For example, businesses that provide supplies to traditional offices are adjusting to facilitate companies providing “work from home” packages for teammates.
One of our clients in the personalization space with a large product catalog recognized a drop-off in purchases for products such as birthday napkins, wedding, and party supplies. The ambiguity surrounding Covid-19 is making it much more difficult to plan parties and large gatherings. However, it’s the perfect time to send someone a personalized gift to show someone that you care. We are editing their product catalog accordingly and testing new messaging using Facebook Dynamic Ads.
The Facebook $100 Million SMB Grant
On March 17, Facebook announced $100 million in support of 30,000 small- and medium-Sized Businesses via cash grants and ad credits. Cash grants will likely cover business essentials like rent and payroll.
As of the week of April 20, Facebook began to accept applications on a market-by-market basis. If your business is in New York or Seattle, the application window opened on April 18. On April 20 applications opened in the San Francisco Bay Area and on April 22 all other eligible cities opened. The application window will remain open for 2 weeks, after which Facebook mentions “a few weeks to review”.
Any business with fewer than 50 employees in an eligible area can apply. You select how you will use the money if granted with options including covering rent, payroll, operations, finance, sales, promotions, essential services, and more. The application process is simple; with a FEIN number and basic entity formation documents for your business, the application takes about 10-20 minutes to complete.
Our Take?
This presents a tremendous opportunity for businesses large and small. Larger brands have the ability to push bigger wellness-themed campaigns. One of the larger sports franchises we work with is in the planning stages of a community outreach campaign in their city. Smaller companies with tighter budgets can take advantage of lower rates to increase ROAS. That new creative you wanted to test? Now is the time to launch it at essentially a discount.
Of course, that is not the case for all businesses. Some simply have had to cease operations. It is our shared responsibility to help those that need it most. Please stay informed and active in your communities. Reach out to us if you have any ideas that we are particularly well suited to help.
We are all in this together. Helping businesses, workers and their families pull through will help us get back to “business as usual” as fast as possible.
UPDATE: Is your Chicago based restaurant or service business trying to pivot to takeout/home delivery or another model? If so Matchnode is happy to help. For the duration of the crisis, we are offering to run paid social campaigns on Facebook/Instagram for free. If you have any interest, please contact us.