On today's episode, we discuss Twitter's major initiatives and figure out what the platform will look like after it reinvents itself. We then talk about Facebook's cost-per-thousand (CPM) recovery, TikTok's ecommerce efforts, and a recent study about COVID-19 news on Facebook. Tune in to the discussion with eMarketer senior analyst at Insider Intelligence Jasmine Enberg.

Social media advertising will remain vulnerable in Q2 and possibly longer. CPMs will stay low, spending cuts will persist, and ad creative will be tricky to get right.

Publishers are the most exposed parties to third-party cookie loss, which will affect ad addressability, causing programmatic cost per thousand (CPM) pricing on the unidentified web to plummet. Publishers expect to increasingly leverage their own first-party data in a cookieless future. How are publishers evaluating new or proposed identity solutions?

Facebook CPMs paid by North America clients were down 17% YoY in Q2 and down 10% in Q3, according to Merkle, while Instagram CPMs went from a 10% decline in Q2 to a 3% decline in Q3. Higher CPMs mean that advertising on social platforms is becoming more expensive, even when compared with 2019.

MM: Higher cost per thousand (CPMs) mean bad actors can get more bang for their buck within the CTV ecosystem. And the technical challenges inherent to CTV mean there are fewer things fraudsters have to “get right” to earn as many dollars as they can. EF: CTV fraud is easier. It’s easy to grow and monetize low-quality apps using fake traffic at higher CPMs.

Story ads were cheaper for the median advertiser in Tinuiti’s analysis, with a 48% lower cost per thousand (CPM) in Q1 2021. But they also had a clickthrough rate 39% lower than that of in-feed ads. There is somewhat more positive data from Merkle, which reported that 32% of its clients’ total North America Instagram spending in Q1 2021 went toward Stories.

“Even with the pandemic this year, we saw CPMs [costs per thousand] go through the roof. Having fewer political ads will help brands in terms of CPMs and being more cost-effective on social media platforms.”. According to data from digital agency Aisle Rocket cited by AdExchanger, for example, there was a 38% spike in CPMs on Facebook between September 2020 and the week before Election Day.

With connected TV adoption rising, advertisers are keen to access an increasingly sizable audience on a sizable screen. In fact, many connected TV ad buyers may pay north of $20 CPMs to do so, according to a new digital ad pricing statpack that eMarketer will be releasing April 10.

That also limits the viability of “eCPM floors” for networks. That is, ad networks have “ad zones” where they’re willing to buy ads, but they stop buying ads when the eCPM goes below a certain level. Facebook already said it will accelerate plans to move away from the waterfall in Facebook Ad Network in response to iOS 14, with all ads filled via bidding by Q2 2021.

When US advertisers pulled back spending dramatically in March, one of the earliest noticeable effects on the display ad market was falling CPMs. At the same time as marketers were lowering their demand for ads—either to take spending cuts as savings or merely pause and rework their messaging—consumers were spending more time on social and traditional media properties, increasing the supply of impressions. A decline in prices was the natural outcome.

Some advertisers counter that higher costs per thousand (CPMs) aren’t worth it, particularly if their main goal is just to reach a large number of people. In November 2019, Digiday reported that some UK advertisers have balked at purchasing addressable TV inventory because the prices were too high.

Less ad effectiveness and lower CPMs: In H1 2020, Facebook ran a test among a group of app install ads in Audience Network. It found that personalized ranking generated 100% more revenues than nonpersonalized ranking. A more general drop in personalized advertising will likely lead to significant drop in CPMs.

It’s a given that marketers are interested in uncovering ways to smartly invest national linear TV ad spend to compensate for price inflation, although 2020 CPMs have dramatically declined. According Philip Inghelbrecht, CEO and co-founder of TV ad agency Tatari, there was about a 40% drop in CPMs among the networks it bought inventory from.

“Programmatic [is] a more performance-based buy because you're buying an audience-first campaign entirely based on CPMs,” said Sophie Pemberton, group strategy director at OOH media specialist Talon Outdoor. “You’re looking at reporting structures [more regularly], and you’ve potentially got more opportunity for attribution modeling.