When will prices drop? (8)
I've been advertising on Facebook off and on over the past 2-3 years, and I don't remember the end of Q4 being this competitive.
As you all know, Facebook prices have skyrocketed recently. I have to bid $0.90+ to get any half-decent volume going ($500/day)... the same traffic would have cost me more like $0.40 or $0.45 2-3 months ago.
My question to you seasoned Facebook veterans out there is - has this time of the year been this bad in the past, and more importantly - when can we expect rates to drop back to normal levels again?
Thanks!
I dunno but I'm seeing the same thing. And CTR's have dropped significantly.
I can't get any ads to stick and my prices are high as well. Are the brand advertisers advertising with insane CPM's to cause this?
Caurmen told me it was because of Q4, i.e. prices are bumped up for advertisers over Christmas.
Any estimates on when this comes back down? A couple weeks into January or so?
You need to understand what is driving the price increases. There are two critical components:
1. Cyclical Increase
2. Secular Increase
The Cyclical increase is, as Caurmen appears to have suggested, related to the season. Most retailers do 75% of the business in Q4 and most of that during December, so there is no question that they will be buying advertising media and hence pushing up prices for these audiences. This component of the price increase should subside by around February.
The Secular increase, however, should have you worried. This is an increase that is not related to seasonality but of a more fundamental nature. In our world, most of these are related to algorithmic or policy changes by media channels that have disproportionate power (yes, I am talking to you Google and Facebook). As these players make "free" exposure a lot more difficult and expensive (e.g. constant Google/Facebook algorithmic changes to organic results, newsfeeds, etc), they force those players who were benefitting from the system into a corner where they need to start paying for the traffic. We have seen this many times before ... e.g. Facebook pretty much killing off Zynga's ridicuously lucrative free acquisition channel and making them pay through the nose for traffic.
Of course, the smart players will have seen all of this coming, and will have already started adapting their businesses to the new environment.
There will always be ways to make money in online advertising. I don't know any surefire secrets to success, but I do know the surefire secret to failure ... and that is to becoming complacent.
I'm sure they will come down a bit...but I think the trend will continue...as FB does a better job getting ROI for clients, more brands jumping on board, and FB users starting to decline (in USA at least) is creating a supply / demand shift.... time to get creative boys and girls.
Originally Posted by cmdeal
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