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esome Social Advertising Price Index Q4|2016

esome publishes the social media price index for the fourth quarter in 2016. The index represents price developments of the previous quarters and operates as benchmark due to advertising campaigns implementes by esome.

As expected the social media advertising spends rose up to 30% in comparison to Q3/2016 around Christmas. This development was already predicted in the esome whitepaper “Is Timing really everything?” in december 2016.

The prices on social advertising increased significantly in Q4, due to growing activities of advertisers during the Christmas season. The CPM exceeds the price level of the last quarter in 2015 and a movement from branding to performance orientated advertising objectivs is recognizable in comparison to previous quarters in 2016. These developments show that advertisers view social media as a relevant channel in matters of direct response campaigns to deploy their budgets efficiently.

It was also exciting to observe the development of Instagram in Q4/2016. The trend of prices and the action rate show that Facebook is moving into the right direction to make Instagram even more appealing for advertisers. Despite the extensive growth of ad spends, the CPM shifts below the previous year’s level and the CPC continuously dropped due to essential developments of ad formats during 2016.

The observation of Q4|2016 on a weekly basis shows an expectable gain of ad spends on social platforms until Christmas, as well as a rise of interaction and transaction campaigns compared to branding campaigns. These developments are less surprising, however advertisers should consider them with regard to planning their advertising measures efficiently next year.

Because of the high price and budget gains, which were especially visible in retail within Q4|2016, a decline is expected at the beginning of the new year. The travel industry however will reach the annual high within the first quarter of the new year. Therefore the price index Q1|2017 will contain a detailed evaluation about this matter.

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