Social media advertising has a long way to go to emerge from the coronavirus pandemic. Low ad prices will persist in Q2 and beyond, and a slow economic recovery will test marketers’ ability to nimbly manage ad budgets, messaging and targeting.

How was social media advertising affected in the last half of March?

Many marketers pulled back spending, even though users were engaging with social media at higher rates. On Facebook, CPM ad pricing fell as much as 50% in March, according to agency and ad tech executives. Snapchat reported stronger-than-expected revenues in Q1 but said year-over-year growth in March was less than half of the rate in January and February.

Why did some marketers continue to advertise as the crisis deepened?

Lower ad prices attracted some companies. And businesses in industries such as technology, telecom and consumer packaged goods (CPG) continued to spend to reach consumers whose daily activities shifted once they started spending more time at home.

What will happen to social CPMs in Q2 and beyond?

CPMs will remain depressed through Q2 and possibly later, subject to the pace of the US economic recovery. There will be significant volatility depending on industry vertical, targeting criteria and other factors.

What are marketers’ social ad spending plans for Q2 and beyond?

Declines will continue in April; May and June may be somewhat better, but nowhere near normal levels. Executives we interviewed were optimistic that the remainder of the year would improve, but as with ad pricing, there is a lot of uncertainty at this point.

How are marketers changing social ad creative and messaging?

Advertisers are shifting toward brand messaging and away from performance-oriented advertising, at least until the US economy starts to reopen. Through social listening, marketers are gaining empathy to consumers’ state of mind.

WHAT’S IN THIS REPORT? This report covers how social media advertising changed in March 2020 and what that means for Q2 and beyond.

KEY STAT: Among US ad buyers who are making short-term changes to ad spending, social ad budgets were expected to decline an average of 28% between March and June 2020.