Cost per thousand impressions (CPM) on Meta dropped to below 2021 levels in the weeks running up to Black Friday last year, after being higher year-on-year for most of 2022.
Latest figures from Nest Commerce show that despite increasing week on week in the run-up to Black Friday, CPM on Meta was less extreme than in 2021 and has remained lower since then.
The platform was also more efficient on Black Friday 2022 than the previous year – with a 47% annual increase in conversion rates, a 44% drop in cost per action (CPA) and a 71% rise in return on adspend – after having recovered since iOS 14.
The latest Nest Index report also found that spend on Reels was up a huge 4000% year-on-year, and despite rising by 115% over the year, CPM was 39% lower than non-Reels formats, hitting levels comparable to TikTok. The trend towards short-form video increased convincingly in Q4 2022, and conversion rates were just 15% lower on Reels compared to non-Reels formats.
Nest Commerce CEO Will Ashton predicted that Meta costs will drop further this year, and noted that the latest figures were evidence of Meta “returning stronger results in the initial period following iOS 14”.
“A combination of lower in-platform costs, driven by competitors pulling out of the auction and improved conversion rates led to much higher returns this Black Friday,” Ashton said.
Which is more efficient: TikTok or Meta?
Nest’s latest research, based on global Meta and TikTok data from more than 40 e-commerce brands, revealed that TikTok CPM was either at half or less than half of Meta CPM across UK traffic activity between Black Friday and the New Year.
“If you do not have a strategy for TikTok, you should be developing one now before platform costs rise,” insisted Ashton.
TIkTok’s CPM remained stable throughout most of last quarter but dropped immediately after Christmas, with click through rates increasing and cost per click down 31% on the December average.
US outpaces rest of the world for cost
Across the globe, Meta’s CPM was down 1% year-on-year for Q4 2022, but up 7% on Q3, but the US remains the most expensive region with CPM rising 38% over the year. In the UK CPM actually fell by 6%, but was 14% up in Q4 compared to Q3 2022.
Click-throughs trended downwards, by 5% in Q4 compared to the same quarter in 2021, possibly due to increased discounting making engagement more challenging, but the fall drove rising cost per clicks (9%) in Q4 2022.
Click through rates in the US were up 37% annually, but were down 8% in the UK and 5% across the rest of the world.
Spend moves to upper funnel
Investment in upper funnel objectives on Meta, like brand awareness or traffic rose by almost 300% between Q3 and Q4 last year, fuelled by brands looking for more efficient and marketing strategies changing since iOSs 14, according to the report.
Meanwhile messaging around sales or offers outperformed all other messaging last quarter, driving 38% higher than average conversion, while Black Friday-specific creative was reliable in driving higher conversion.
“With a new year comes new marketing budgets. Your brand should be looking for efficiency instead of wholesale cuts, especially in channels where you reach new customers,” Ashton concluded.