Marketing Movements - May 2022

May 2022 proved to a great month across the board for our index of clients in various industries as Facebook not only dropped their Advertising CPMs substantially from the huge hike we saw in the previous month on April, but also CTRs have shot up, potentially signally improvements in the FB algorithm being able to show more segment targeted ads following the chaotic downgrade after iOS14 Rolled out last year.

Ecommerce businesses in our index noticeably saw a decrease in the CPA's of 14% on average, this is likely due to the various Summer Related offers/sales that advertising are beginning to push out which of course brings down CPAs. Our Index companies in Europe however were not as fortunate with the CPA & CPM dips that their North American Counterparts saw. Ecommerce companies in Europe saw relatively no changes to their advertising Metrics compared to April, with only a 2% decrease in CPA being notable to mention. Potentially the European market hasn't quite launched their summer sale campaigns and that's something we might see reflected in June's data next month.

Advertisers indexed in the Asian markets saw the most significant improvements across the board in the last month, CPAs were reported to be down 32% in some industry sectors which mostly likely is due to CPMs also dropping by quite a similar substantial amount at 28%
‍
Mobile app advertisers did the South American & European markets both did not perform as well as they could of, both seeing CTR falls of 6% & 8% respectively. Despite these companies still seeing lower CPI's for this month, it is important not to ignore the fact that CTR's are increasing and if a large volume Creatives tests are consistently conducted to optimize performance then they could run the risk of being completely blinded when CPA's skyrocket as CPMs return back to normal. Reviewing all metrics in your funnel is as important as ever, don't get complement with a lower CPA when compared to 30 day rolling basis, a decreasing CTR indicates a strong need to arrange further creative tests for various angles, messages & tactics in your marketing funnel before CPI/CPA's get unsustainably high. Companies that are seeing sustainable CPA results right now but haven't double down and focused on data driven creative tests are asking for trouble...

As we enter the official "Summer" period of the year, we expect to see more Advertisers enter the auction and whatever the reason for the CPM drop in May were, most likely won't be holding up in June so it is sensible to change forecast and growth models accordingly in preparation of the CPM hikes we'll soon see. CPA's will of course be effected by rising CPMs however if proper/relevant offers are in place in your marketing then it is likely you can combat this rise in cost. And of course, Investing heavily into producing high quality converting creative based of past data is absolutely critical to run campaigns profitably in the next few months & years on Facebook especially in the midst of all the changes we've seen taken place on the platform since the iOS 14 update.