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esome publishes Market Insights for Q4 | 2019

Posted on January 31, 2020

The fourth quarter including Black Friday and the busy Christmas season was the most competitive quarter in 2019. In our Market Insights we analyse the current market and price developments on social platforms and give an outlook on which new advertising inventories and advertising formats will have a positive effect on the price development in 2020.

The esome Market Insights illustrate the market and price development of the past quarter by means of advertising campaigns implemented by esome on social networks. In addition, they summarize the highlights on the social platforms for advertisers. Advertisers can use the Market Insights to generate lessons for their own activities and get an outlook on the development of the social media market. Market Insights Q4|2019 thus serve advertisers as orientation for future campaigns on the interactive platforms.


Price developments in the fourth quarter of 2019

The fourth quarter including Black Friday and the busy Christmas season was traditionally the year’s most competitive quarter in the advertising industry. Advertising spend increased by 29 percent from the third to the fourth quarter. With a significant budget increase, branding campaigns have benefitted most from this strong growth, which was also reflected in a significant increase in inventory prices. Despite the strong increase in social media spending in the fourth quarter, inventory prices were lower than in the fourth quarter of the previous year. This was in part due to the steadily increasing number of advertising inventories on Facebook and Instagram's significant growth in market share.


Highest inventory prices of the entire Christmas business on Black Friday

While prices were still comparatively low at the beginning of November, prices increased from the second week of November onwards, signalling the start of the Christmas advertising business. On the highly competitive Black Friday inventory prices were 40 percent above the average price for the entire quarter. The most popular advertising format with the strongest influence for Black Friday advertising activities was video campaigns. At 40 percent above the quarterly average, inventory prices reached their quarterly high on Black Friday. The strong competition for inventories for video campaigns was the main driver for this significant price increase.

 

Avoiding the strong competition during the Christmas business through efficient media planning

The competition for user attention is much stronger in the week around Black Friday than in other weeks of the year. The distribution of advertising spending on the various campaign objectives differed significantly between the platforms in the week around Black Friday. For advertisers, it is therefore recommended to reduce campaigns that are not specifically related to Black Friday during Black Week and to focus on the phases before and after the event with long-term and sophisticated media planning.

 

New advertising formats and inventories have a positive effect on price development

Over the course of the last few quarters, a reduced but typical seasonality in advertising spend and prices could be registered. The overall lower price level compared to the previous year was mainly due to the expansion of various advertising inventories and is expected to continue next year due to the steady expansion of marketing opportunities on the still young platforms such as Pinterest, TikTok and Twitch. In addition, new "shoppable" advertising formats will expand the inventories on many platforms and will increase the focus on social commerce in 2020.

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