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Facebook Ad Spending is Down, Should You Be Worried?

October 29, 2020Sparxoo


2020 has been a complicated year for Facebook. Just as the pandemic caused many companies to cut their spending on Facebook ads (particularly those in the hospitality and tourism industries), another seismic event occurred: an ad boycott.

Here’s what happened, and how this could affect your business in the coming months.

#StopHateForProfit Campaign

The roots of the #StopHateForProfit campaign started in the 2016 election over concerns about Russian interference in the American election. Four years later, the campaign regained momentum with the intersection of a global pandemic, a renewed civil rights movement, and the upcoming 2020 presidential election.

Activists behind the campaign encouraged big businesses to cut their Facebook ad spend in protest of Facebook’s alleged mishandling of hate speech and misinformation. Over 1,000 companies joined in on the campaign, cutting all of their Facebook and Instagram ad spending.

How Has the Boycott Affected Facebook?

From a reputation perspective, Facebook has lost respect from businesses, organizations, and individuals across the globe. However, from a financial perspective, a vast majority of Facebook’s ad revenue actually comes from small to mid-sized businesses, so big businesses cutting spending didn’t hurt them as much as one might expect. In fact, their Q2 stock was up 3.2% (ended June 30). 

All that said, Zuckerberg and the team are working to improve their status. According to Facebook communications chief, Nick Clegg, “We may never be able to prevent hate from appearing on Facebook entirely, but we are getting better at stopping it all the time.”

How Does this Affect Marketers?

From a marketing perspective, Facebook being hit this hard with bad press might affect the success of ads, but it depends on the business and industry.

People are still using Facebook just as much as they ever have. In fact, at the end of Facebook’s Q2 2020, they reported an 8% YOY increase in users. With so many people having sheltered in place this year, an increase in social media usage is no surprise. 

At Sparxoo, we’ve seen no shift in cost per click (CPC) or cost per lead (CPL) across our clients’ Facebook and Instagram campaigns. In fact, across all our Facebook Ad campaigns for our clients, our average cost per click is $0.97. Considering the average CPC of a Facebook ad is $1.72, that’s not bad!

How Should You Use Facebook Ads?

Facebook isn’t the perfect medium for just any ad campaign. Depending on what you’re advertising, it may be better to work with LinkedIn, Twitter, YouTube, Google, Reddit, or a different, specialized platform. However, if your target audience matches any of the below criteria, Facebook might be the right match for you:

  • High income (74% of users are high income)
  • International (only 10% of regular users are in the U.S. and Canada)
  • 65 or older (teens are using Facebook less and less, while 40% of the “Silent Generation,” born pre-1945, are now users)

Furthermore, if you’re trying to reach a majority of the American population with a message, Facebook is still one of the best mediums to accomplish it. As of June 30, 2020, 81% of all American adults have a Facebook account.

Despite the social, political, and economic turmoil that Facebook has been dealt and brought upon themselves this year, they’re still a viable paid social ad strategy. Plus, by buying ads on Facebook’s ad platform, you’re also able to advertise on one of Facebook’s many other owned platforms, like Instagram, Messenger, and WhatsApp.

So, should you be worried about spending your hard-earned money on Facebook Ads? Frankly, it depends. Based on the message you’re advertising, Facebook might not be the right media to use. However, from a purely metric-based standpoint, Facebook is still running smoothly and has proven to hardly be affected monetarily by its recent bad publicity.

As long as Zuckerberg and Clegg follow through on their claim to invest more on limiting hate speech and misinformation, this may become a blip on the radar of Facebook’s continual powerhouse domination of the online realm. In the meantime, if it makes sense for your business, take advantage of Facebook’s low cost per click, and start converting new leads.