Strong Growth in Social Media Ads Spend

Good news in the current slump: Social media ad spending is back to pre-health crisis levels. The trend is expected to continue with the arrival of the holiday season for which many purchases are expected to be made online.

A study by Socialbakers, a global AI-powered social media marketing company, shows that in the third quarter of 2020, ad spend increased globally. Between the second and third quarters of 2020, globally, they increased by 56.4%. 

Advertising spending by region between September 2019 and September 2020. Source: Socialbakers.

In Western Europe, this increase is lower than the average: + 50.4%. In contrast, North America recorded the largest increase with + 67%. This figure should be qualified, because spending across the Atlantic fell sharply in the second quarter due to the boycott of Facebook ads. However, it is important to note that compared to the third quarter of 2019, ads spend increased by 27.6%. 

Advertising spending by industry between September 2019 and September 2020. Source: Socialbakers.

Cost per click (CPC) increased 42.4% in Q3 2020, dropping from $ 0.168 to $ 0.188. Again this increase is lower in Western Europe with a 30.8% CPC increase. Despite this increase, on Facebook and Instagram the click-through rate has remained stable, but they are still the ones with the highest ad spend. Between these two, the Facebook feed has a better click-through rate than Instagram, at 1.82% versus 0.33%. 

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Sharp increase for staple foods
Advertising spending in the FMCG sector increased 61.3% between Q2 and Q3 2020. This is the largest increase and is followed by the automotive industry with 59.4%, then by finance marked by an increase of 35.3%, and ecommerce which saw its advertising spending increase by 27.5%. 

Scope of advertising by sector between September 2019 and September 2020. Source: Socialbakers.

Engagement rate by sector of activity and by social network. Source: Socialbakers.

So it's no surprise that on average, Facebook ads reach increased 52.2% for FMCG food products. Residential (+ 42%) and e-commerce (+ 16%) advertising are the other two sectors where ad serving is the most viral. The automotive industry, which ranks second in terms of investment, is paradoxically not the one that has reached the most consumers. Finally, the beauty sector, particularly penalized by confinement and teleworking, saw the reach of its advertising decrease by 15.3% between the third quarter of 2019 and that of 2020.

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