Facebook, Google, and Instagram ad Prices are Dropping. Cheap ads for Startups?

Digital ad prices are dropping faster than oil? Well. Ok. Not quite. Facebook and Google won’t pay YOU to advertise, ad bidding is smarter than commodities markets. But this still represents one of the greatest opportunities in digital advertising in a long time.

For example. Expedia announced it cut its ad spending from $5 billion to $1 billion. That represents $4 billion in ad spend you are no longer bidding against, granted not all of that is digital ad spend, but the point still stands. Companies are spending less on ads. Google, Facebook, and Twitter have had predicted revenue cut by 20% thanks to falling ad spend. I have personally seen a 20%+ increase in reach for some accounts I manage without changing the ad budget.

For those just getting started in digital ads, they work on a bidding system. You first enter your target; for Google, it is keywords, and for Facebook/Instagram, it is interest and demographics (like 25-40-year old’s in Minnesota who like to travel.) Then you put in a daily budget and a bidding strategy. You are then competing against other advertisers that overlap your targeting. The platform uses factors like your max bid, relevancy to the user, and quality to determine which ad is shown. You get charged each time your ad is shown. So simply put, the fewer people advertising, the lower the price.

Travel is the hardest hit. What does this mean for your brand? If you can give people something to do or buy while they can’t go anywhere, this is a golden time to buy ads. Game makers have drastically increased there ad spend, as more people are staying home playing games. But remember, the lives of everyone has changed in the past few months. Be conscious of this when you are building an ad campaign. Make sure your message and product are applicable to anyone staying at home and going through challenges.

As with any time, we suggest starting slowly with ads. The key is always test, test, and more testing. Test audiences, copy, graphics, and conversion funnel. The average Cost Per Click (CPC) for all ads on Facebook is $1.72 before Covid-19. But this price varies by industry. Check out this information from Word Stream:

If you are running any digital ads right now, let us know! Do you see cheaper CPC and higher reach?

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