Report Indicates a Massive Impact on Social Media Ad Spend in Q2 in the wake of COVID-19 and Protests!

Ahead of Facebook’s announcement of its Q2 results this past Thursday, Socialbakers published its own Q2 findings to highlight the impact of protests and COVID-19 on the ad revenue. For those of you unaware, a “Stop Hate for Profit” campaign to boycott Facebook initiated early in July and has already been endorsed by numerous civil rights groups and advertisers including Verizon and Adidas.

As per Socialbakers, different metrics of social media advertising recorded noticeable changes in Q2 amidst the ongoing protests against racism and COVID-19. Firstly, on average, the cost-per-click across social media platforms and other industries took a hit of 38% year-over-year.

While CPC’s weak performance during the last three months is pretty concerning, what’s relieving is the fact that the social media ad spending showed quite an improvement from the end of Q1 2020. This is due to the ease in lockdown restriction across different states over the past few months.

After increasing by over 92% in comparison to the final part of Q1, ad spend in North America took a hit of 32% in the last couple of weeks of Q2. Interestingly, this sudden plunge was due to numerous advertisers pulling out of Facebook due to the social media giant’s hate speech policies.

Socialbakers indicates that June 2nd’s Blackout Tuesday protest resulted in some reduction in ad spending as the social media activities were halted by marketers on the said day.

As for Facebook’s News Feed, a year-over-year reduction of 2.6% in ad spend was observed in the last quarter, as compared to Instagram’s 4.2% plunge. From the start of 2019 to the end of Q2 2020, Facebook’s News Feed recorded a collective social media ad spend hit of 6% (64% to 58%). As for the same metric for Instagram, it dropped two percent in May of this year from the 21% peak recorded in July 2019.

It should also be noted that Facebook News Feed was able to get 60% (on average) of the total ad spend in the last quarter. Instagram Stories and feed, on the other hand, got only 28% of the pie’s share.

Moving back to CPC, it was reduced to a concerning low of $0.075 during April but eventually rose to $0.107 over the next two months. Taking a year-over-year dip of 2.3% in Q2 according to Socialbakers is click-through rates or CTRs, finishing at 1%.

A whopping 21% rise in CPC and a 19% rise in CPM in Q2 were observed in Facebook’s in-stream video, in comparison to its performance last year. Moreover, Ads present on Facebook News Feed recorded the most impressive CTRs (1.9%), surpassing Facebook video feeds in the said department by 1.1%. in-stream video by 1.3%, Insta feed by 1.6%, and Insta Stories by 1.7%.

It was also discovered that in a full year, the Ad CPC for Facebook News Feed as well as Instagram feed plunged by 37%. In the same period, the CPM for Instagram Stories and Facebook News Feed took a hit of 28%.
"On Facebook, the relative post interactions for the top 50 largest brands returned to normal levels in Q2 2020 after a sharp increase at the end of Q1 that was likely related to the worldwide pandemic."

Snap and Twitter should also be brought into the discussion. These two companies already confirmed the effects of the pandemic on ad spend on their platforms despite the fact that social media usage has been immensely high since the pandemic hit.

Twitter’s ad revenue reduced by 23% year-over-year, resulting in a total revenue drop of 19%. On the contrary, the microblogging platform recorded a 12% growth of users between the end of Q1 and Q2. Similarly, video content consumption also increased on Twitter in the month of June.

As for Snap, its annual revenue plunged by 27% from Q1’s end to Q2’s. However, its total number of users hit 238 million, a 4% increase from Q1.

Read next: Pinterest boasts 416 million monthly active users and 4% revenue growth in Q2 of 2020
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