This POV was written by Michael Pecci, Senior Director, Digital Activation at OMD with contributor Ben Hovaness, Managing Director, Marketplace Intelligence and Innovation at OMG.

Executive Summary:

COVID-19 has dramatically changed both consumer and advertiser habits in a short amount of time.

Reports of increased online video streaming, content consumption, and app usage correlate with self-isolation orders across the United States.

Consequently, there has been an overall increase in ad inventory availability on social media platforms.

This increase on the supply side has been met by significant decreases on the demand side.

Advertisers across entire industry verticals have slashed ad spending, from travel and hospitality – whose businesses have been reduced or shuttered due to plummeting consumer demand for their products – to CPG companies – where some brands have seen increased at-home consumption of their products overwhelm their ability to keep shelves stocked.

Together these supply and demand shifts have combined to reduce CPMs across social media platforms. We are seeing CPMs decreases on the order of 20-40% across various platforms for the most popular ad placements, with variation based on the objectives being analyzed.

These reduced CPMs are an opportunity for brands to reach consumers more efficiently, and certain advertisers in categories like gaming and streaming have piled into the marketplace to take advantage. If brands are considering such an approach, we advise a consultation with agency partners to go to market with the right message and adapt to brand safety controls during this crisis.

ad spending, from travel and hospitality – whose businesses have been reduced or shuttered due to plummeting consumer demand for their products – to CPG companies – where some brands have seen increased at-home consumption of their products overwhelm their ability to keep shelves stocked.

Together these supply and demand shifts have combined to reduce CPMs across social media platforms. We are seeing CPMs decreases on the order of 20-40% across various platforms for the most popular ad placements, with variation based on the objectives being analyzed.

These reduced CPMs are an opportunity for brands to reach consumers more efficiently, and certain advertisers in categories like gaming and streaming have piled into the marketplace to take advantage. If brands are considering such an approach, we advise a consultation with agency partners to go to market with the right message and adapt to brand safety controls during this crisis.

Click to continue reading: OMG_COVID-19_SocialMediaPricingPOV_22April20

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