Marketers are paying a higher price for video advertising on social media owing to an increase in demand.
A recent Digiday report says Facebook, Snapchat, and YouTube are demanding higher cost per mille (CPM), as compared to April. The spike in CPMs for video ads on social media indicates the rise in demand among marketers; however, it is still not matching the pre-pandemic levels. At present, it is not clear whether CPMs will witness a spike in coming months; however, marketers looking for audiences who are spending ample time on social media may find some deals.
Rising CPMs are beneficial for publishers depending on ad revenue to support their operations.
The marketing industry has taken a major hit to their ad revenue due to the COVID-19
pandemic. As CPMs are bouncing back marketers distributing video content on platforms like Facebook, Snapchat and YouTube will benefit.
The rise in CPMs indicates the advertising market will see a gradual growth in the later year. Major social media enterprises reported higher revenue for Q1 and also hinted about a slow growth as pandemic lockdowns went into effect in the U.S. and Europe. According to the report, the existing quarter will more likely witness a significant pullback in ad spending in April, followed by a recovery in May and June as markets embrace post-lockdown effects. The effect of the pandemic will be seen clearly when social media companies report their Q2 results in July and August.
Several social media platforms saw a dip in demand from advertisers at the start of the
pandemic, but there was also an increase in the usage and the higher engagement is expected to stick around going forward. In addition to the increase in social media activity, other features like live video streaming on Facebook and Instagram are roping in significant attention as well as ad revenue as the world starts to enter to “new normal”.