As per a new research note from Piper Sandler, Meta’s Facebook continues to suffer falling advertising prices. Facebook ad rates have dropped every month this year by as much as 19 percent in April and May and 15 percent in March.
Analyst Thomas Champion Reports On Meta Fall In Ad Rates
According to analyst Thomas Champion, Instagram is experiencing better times, with CPMs (cost per thousand impressions) increasing by 15% in May after exhibiting only slight improvements in the first five months of the year.
According to Champion Analysis, year-to-date through May, Meta (ticker: META) ad price on a blended basis, including Instagram, is down 8 percent from the prior year. With Instagram’s improvement, CPMs fell by 6% in May instead of 11% in April.
The analyst says that it will be hard for Meta to compare itself to the same time last year in the next few months. Last year, Facebook ad rates increased by 40 percent in June, 35 percent in July, and 18 percent in August. At that point, Apple’s (AAPL) App Tracking Transparency program started, and the rise in ad prices slowed down.
While CEO Mark Zuckerberg did sound “more confident” on Meta’s first quarter-earnings call compared to the fourth-quarter call, Champion noted that the business still confronts “a plethora of problems,” including slowing e-commerce spending, inflation, and other macroeconomic issues, and the post-pandemic closure, which reduces consumer time spent online.
Also, while making significant investments in the virtual world, the corporation is still facing stiff competition from TikTok.
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Positive News For Meta: Says Champion
On a separate note, Champion mentioned several favorable developments for Meta during last week’s Apple Worldwide Developers Conference. The news here is that WWDC did not introduce many new privacy efforts that would impact the advertising industry. Even though new initiatives have been unveiled at the previous two conferences, this year’s keynote omitted any discussion of privacy.
In particular, Champion pointed out that Apple did not object to “fingerprinting,” a method for tracking people through their devices and whereabouts.
Although theoretically forbidden by Apple’s App Tracking Transparency standards, he speculates that “it’s possible Apple has turned a blind eye to fingerprinting” due to the widespread effects of Apple’s reforms on the advertising industry.
Overall Outlook For Facebook Ads
Facebook ad rates have dropped every month this year, by as much as 19 percent in April and May and 15 percent in March. Instagram is experiencing better times, with CPMs (cost per thousand impressions) increasing by 15% in May after exhibiting only slight improvements in the first five months of the year. While making significant investments in the virtual world, the corporation is still facing stiff competition from TikTok.
Apple did not object to “fingerprinting,” a method for tracking people through their devices and whereabouts, although theoretically forbidden by Apple’s App Tracking Transparency standards.
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