Navigating Business Through Disruption: Social Spending

As people work from home during the COVID-19 pandemic, they understandably are spending more time on digital screens. Facebook notes that “the usage growth from COVID-19 is unprecedented across the industry, and we are experiencing new records in usage almost every day.” This usage spike, coupled with the fact that most brick-and-mortar businesses remain closed, has put social advertisers in an awkward position when it comes to flighting media. On the one hand, it’s tempting for advertisers to decrease social spend right now. That’s because many businesses consider social to be an awareness/consideration stage play, and when they look for ways to cut their budgets, often pull from the top of the funnel first. On the other hand, advertisers willing to continue spending on social may very well reach more people at a lower-than-typical cost. Let’s take a closer look at social spend as part of our four-part series on navigating a business through disruption.

Social Spending for Ecommerce Businesses

We’ve worked with a number of clients to adapt their social spend during the pandemic, and we’ve learned a lot. Let’s start with Ecommerce businesses. Our Ecommerce clients increased Facebook ad spend in the month of March in an effort to combat the losses coming from their brick-and-mortar locations.

For conversion-optimized campaigns, we’ve noticed a decrease in CPMs compared to February (generally ranging from 20-30%). For this objective, we’ve also seen quite the increase in social return on ad spend (upwards of 30%, in some cases). These increases are partly to be expected with in-store retail options not currently at a shopper’s disposal, and with increased promotions added to maximize sales volume. That said, the opportunity to scale paid social’s contribution to an Ecommerce initiative is noteworthy. After all, while consumers can’t browse their local shopping centers, they are spending more time on social media where they are open to (and often expecting) to have relevant content delivered to them.

Our Ecommerce clients also noticed a general decrease in CPMs for campaigns using the site-traffic objective, though cost per click and cost per session metrics did not see a collective change month over month. We are not suggesting that brands should open the media floodgates during the pandemic, even with the noticeable performance increases we have observed on social. Instead, advertisers should monitor any media they are spending on the channel and assess performance in relation to baselines established through historical data (assuming it exists, and ideally segmented by audience category and objective). Knowing those baselines will help Ecommerce brands test the limits of scalability should their performance see the same uptick we’ve observed.

Social Spending for Restaurants

Now let’s take a look at multi-location restaurants, another industry where we have extensive experience., The pandemic has hit restaurants especially hard, and they’ve needed to quickly shift their entire operations to offer delivery/curbside/takeout exclusively. Prior to March, our restaurant clients were spending the majority of social Facebook ad dollars in order to increase in-store visits. However, Facebook recently announced that, “to help prevent the spread of coronavirus (COVID-19), the store traffic objective is temporarily unavailable.” Eliminating this objective optionI is not as strategy altering as it might seem. Although we were primarily using this objective, our agency was optimizing delivery for those campaigns for “daily unique reach,” which ultimately improves store visit performance (at a more efficient cost than optimizing for “store visits” itself).

Facebook has always asserted that reach most positively correlates to sales for multi-location businesses. So, the strong results we’ve seen with the combination of the Store Visit objective and delivery optimized for “daily unique reach” is not all that surprising. The good news for restaurants who are still open for take-out and delivery is that the Reach objective remains available. The only pitfall to Facebook temporarily removing the Store Visit objective comes from the ability to filter store visits by business location (which may or may not be important to the brand). It’s important to note that the Store Visit metric is still available (and tracking) in Facebook. Advertisers can still see data in relation to campaigns they run for other objectives (like Reach), though it might be at a lower accuracy level (since Facebook tries to filter out “people who may be employees or appear to be moving past your stores rather than visiting” and quick, curbside pick-up might inhibit Facebook’s ability to attribute). Facebook does clarify “because not every visit to a store can be detected, store visits results are modeled.” With, even with the disablement of the Store Visit objective, our restaurant clients did not see a significant change in Cost Per Store Visit for the reach-objective campaigns we pivoted to running.

In line with our Ecommerce clients, the restaurant brands we manage Facebook Ads for saw a noticeable decrease in CPMs in March compared to February (also in the 20-30% range). While this partially has to do with the switch up in objectives (Reach campaigns will typically see lower CPMs, even compared to Store-Visit objective campaigns optimizing delivery for the “daily unique reach” option), the CPMs we observed were significantly lower than other reach-objective campaigns we had run previously. Though consumers may be stuck at home, they still need to eat, and that dining experience from a favorite restaurant (even when it’s taking place on the couch or in the confines of the kitchen), might be the shred of normalcy or enjoyable escape that a person is yearning for. Restaurants who are open for delivery or takeout have the same ability to “create the crave” through Facebook Ads that they’ve always had, and it might be at reduced price given the influx of app usage.

Correlation does not imply causation here, and the trends we’re referencing apply only to our clients from which we have data for (so they should not be understood to blanket their corresponding industries), but they are interesting, nonetheless.

There is no one-size-fits-all approach to social advertising, especially during times like these. Although consumers may be stuck in perpetual lockdown, they are spending more time than ever on social networks to keep themselves informed and entertained. With more eyeballs on digital screens, social budgets may go further than usual in reaching a target audience and driving a desired result. If a brand does decide to move forward with (or scale further) media efforts during this pandemic, then delivering a clear and sensitive-to-the-times message that anticipates the wants and needs of a consumer should now, more than ever, be at the forefront of their advertising plan.

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