5th Quarter 2020 – Are You Ready!?

5th Quarter 2020 – Are You Ready!?

  • by Brian Bowman | October 20, 2020
  • Facebook Advertising
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Q5 2020 is coming. That is right! We believe there will be a 5th Quarter in 2020 for Facebook and Google mobile app advertisers!

It is an understatement to say that the 2020 mobile app advertising market has been unique. From COVID a surge in mobile app usage and a decline in advertising CPMs March through June, to Apple’s IDFA removal announcement in June, to the September launch of Facebook’s Automated App Ads (AAA), to the current massive spike in Facebook 2020 election spending. This year has been full of tremendous change and we are not done yet!

Every year about this time, we publish a post discussing how to maximize your Q4 app ad budgets (here is our 2019 post). This year, we are not talking about Q4, we are talking about Q5 2020. Q5 refers to the 10-day period starting between the last Amazon shipping day before Christmas through New Year’s Eve. In which retail and eCommerce pull back on their marketing budgets and other mobile app advertisers can take advantage.

  • The 2018 graph below represents a normal year. CMPs spiked 30-40% between Black Friday & Christmas and then dropped around Amazon’s last ship day.

5th quarter 2020 black friday

  • 2017 vs 2018 were similar (note we pulled back more in 2017), CPMs spiked 30-40% between Black Friday & Christmas and then dropped around Amazon’s last ship day

Facebook CPMs

  • Below are a cluster of 2019 mobile app advertisers, notice the large CPM increases between Black Friday & Christmas, and then the drop in costs for what we are calling – “Q5”.

Q5 2020 – Here’s Our Take:

 

(1) UA in mobile app advertising will be fiercely competitive, but pricing should be less volatile in late December.
  • COVID-19 has significantly reduced foot traffic to stores throughout the year. We anticipate this will accelerate the move to online advertising for retail businesses for the holidays. Ecommerce brands we have spoken to appear locked and loaded to go bigger sooner and advertise as long as possible on Facebook and Google this holiday shopping season to make up for the loss of foot traffic.
  • Volatility may be more evenly distributed throughout November and December versus the mad dash that traditionally kicks off with Black Friday shopping and runs until a few days before Christmas.  If people are not coming into stores, why should retailers wait?  Why not start special offers after the election?
  • To capture this opportunity, we are advising mobile app advertisers to plan their budgets and creative production carefully.  Advertisers should produce holiday creative early to capture a potentially extended online shopping season. They should also bulk up production and testing to capture CMP drops related to Q5 – (e.g. the post-holiday CMP hangover).
(2) Mobile app advertisers should have their biggest November / December / Q5 ever!
  • Due to this unprecedented holiday season, eCommerce will give it everything they have got between Black Friday and Christmas. Then pull back severely after December 22nd.
  • This effect will be felt more significantly in 2020 due to the overwhelming amount of first-time eCommerce spenders forecast to be participating this year. Thus pulling back near Christmas.
  • This year more than ever, mobile app advertisers should be ready to capitalize on an influx of ad inventory primed for non-eCommerce shopping. We are advising gaming, entertainment streaming apps, meditation and fitness apps, DTC, and others to GET READY!
(3) Travel industry demand will flow into other verticals instead.
  • The travel industry has been hit extremely hard in 2020 by global quarantines that started in March and show no signs of slowing.
  • Holiday gatherings this year are advised to remain small. And travel discouragement is causing travel advertisers to forecast a low spend season.
  • This poses an additional opportunity for mobile app advertisers to reach millions of people staying home, finding gaming, entertainment, health, and fitness as a means to “escape or enhance” their at-home time.
(4) People are much more likely to connect more this holiday through shared experiences via social sites vs in-person traveling.
  • Gaming with friends has never been more important. We expect that social platforms like Facebook, Google, and TikTok that offer a way to play and engage with friends and family will continue to surge through the winter season and well into 2021.

 

How We Can Help?

  • Cheaper, Better, Faster: we are expanding our creative capabilities to deliver “Cheaper, Better, Faster” (Sir Martin Sorrell). We believe this will be the new marketer checklist during the economic recovery.
    • We produce Hollywood-level creative at a fraction of the cost of holding company creative shops. And at high velocity of production with proprietary testing methodology tied to business outcomes.
    • Check out our new Gaming Reel & Non-Gaming Reel.
    • We have sharpened our teeth in immersive digital storytelling (gaming) and bring that storytelling to new brands, verticals, and markets.
    • Our creative and platform are geared towards performance and business outcomes instead of awards.
    • Our capabilities lend themselves to emerging digital media such as OTT, DTC, Mobile Web, and DOOH. As established brands are forced to adapt to post-COVID digital transformation.

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