A few weeks after the one in which content shared by friends and generating interaction is prioritized over that of media, brand and company pages, a new study has just confirmed a surprising reality: the cost of CPM on Facebook (cost per thousand impressions of an ad) has increased exponentially.
Just eight weeks after announcing this radical change, CPM prices on Facebook are up 122% from the same period last yearbased on data provided by the ad technology company adstage Y
The CPM on Facebook has shown an upward trend in recent months
To give us a better idea of what this increase represents, a year earlier, the year-over-year growth rate of CPMs on Facebook it was barely 45%. The new results have marked the highest year-on-year jumps in advertising prices for Facebook in the last 14 months.
This increase in CPM on Facebook makes sense when you consider that the algorithm change on the platform means fewer news articles and announcements in the users’ timeline, which in turn generates fewer ad impressions. In addition, Facebook recently announced that users worldwide spent an average of two minutes less per day on the platform during the fourth quarter of 2017.
In fact, the CPM on Facebook had increased 37% quarter-on-quarter. So this trend in impression growth has been ongoing for the past few quarters. If we also take into account that Facebook, CPMs on Facebook can increase even more if demand remains constant. Thus, the change in the algorithm may only be increasing a trend that was already present.
The CPM in social media grows in general
This trend in the increase of the CPM also is present in other . made by digital marketing software provider, Marin Softwarethe CPM in has increased by 44% in the last quarter compared to the results shown the previous year.
This increase may be due to increased competition among advertisers to try to grab the attention of consumerswhile the (user clicks to an advertisement with respect to the number of impressions) has remained unchanged compared to the same quarter of the previous year.
In any case, the increase in CPM on Facebook has not managed to reduce advertising revenue on the social network. 2017 platform generated $12.8 billion (approximately 10,327 million euros) in advertising revenue, increasing the $10,100 million dollars (8,149 million euros) that it obtained during the third quarter in 2017.
Without a doubt, these data will put in context the future that Facebook may face in terms of its advertising. According to these figures, the most likely is that advertising prices will continue to rise in the coming months, not to mention that advertisers will continue to invest in the platform, since it is the social network with the most active users in the world.
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