It’s true, Q4 comes with candles, cookies and holiday cheer … but the one gift we’d all like to return is that inevitable increase in cost per result we see in digital advertising this time of year.
There are a few reasons for it:
- It’s the holiday season, which means advertisers are introducing an influx of spend on social which we saw begin happening at the end of October and continue to increase throughout November.
- More advertising dollars means that there’s now more competition for social media users’ attention. It comes down to that classic tenet of economics: supply and demand.
If misery loves company … you’ve got plenty of it (and not just the in-laws). For example, when looking at the cost per lead for media organizations during the first half of the year, we saw that the average CPL was 86 cents. In the second half of the year, that cost has jumped to 93 cents. That increase has been mostly driven by the increased competition of dollars in the paid social space.
If we look at it a little closer, in Q3, the average cost per lead for publishers was 88 cents; in Q4, the average cost is $1.01.
Facebook representatives recently told us that they’ve seen costs rise sharply and that for leads, this is the highest they’ve seen them.
Leads, of course, aren’t the only campaign being affected by the onslaught of dollars vying for attention. We’ve seen similar increases in conversion campaigns and have seen an increase in CPM costs as well.