CPM increasing of advertising in the content of publishers on social networks is the first sign that the demand among marketers is growing, although it is still not as high as to the pandemic level. It’s not clear that CPM will rise even more during the summer months amid typical seasonality, according to Digiday, but marketers looking to attract an audience that spend more time on digital media might find some deals. This is especially true for companies such as retailers, e-commerce and restaurants that reopen and need to expand their businesses.
For social media companies, higher CPMs indicate that the digital advertising market is starting to thaw, which could be the reson for growth at the end of the year. Social media companies reported higher earnings for the first quarter, although they also warned of a slowdown that began in mid-March, when pandemic control measures took effect in the US and Europe. In the current quarter, most likely, in April there will be a significant reduction of advertising costs, after which recovery will take place in May and June, as many regions have begun to reopen enterprises. A clearer picture will appear when social networking companies report their second quarter results in July and August.
Even though in the beginning of the pandemic, the demand for advertisements decreased for many social networks, their use increased sharply, and a higher level of engagement may remain unchanged. In addition to a burst of activity, some features that were not previously used, such as live streaming on Facebook and Instagram, also attract more attention, and dollar brands may follow pressure.