Tips | December 23, 2020

Q4 ‘Seasonality Effect’ in Facebook Advertising and how to Navigate it

Ever wonder why your CPA is getting much more expensive recently? It is highly likely due to seasonality of online advertising.

The effectiveness of your ads varies by seasonality, with data showing that Q4 is generally the most expensive time of the year. It is not surprising considering most major consumer events such as Black Friday and Christmas occur during those months.

So does that mean you should stop advertising in Q4?

No it doesn’t!

Depending on the type of business and the products/services you sell, you might want to accept the higher CPM rates or adopt different strategies to navigate this expensive period.

Read on to find out how you can navigate this harsh advertising environment.

Why is Q4 generally the most expensive time of the year to run Facebook ads?

As most major consumer events such as Black Friday and Christmas occur near the end of the year, consumers are in buying mode while advertisers are readily spending big bucks on ads to capture a share of the pie. This raises the overall CPM rates for ads.

In addition, the end of the fourth quarter is also the end of the financial year of many companies. And spending the remaining marketing budget on advertising is one of the quickest ways to expense their remaining budgets.

This is why you can expect the fourth quarter to be the priciest period in terms of advertising.

We’ve compiled three charts below showing you the average rates on Facebook in 2018 and 2019.

The pattern is clear: Q4 typically see some of the highest rates compared to the rest of the years.

2019 Monthly CPM rates by Sortable

2018 Advertising Spend by Freestar

2019 Monthly CPC by AdEspresso

While each company has their own method of measuring the price of ads, the general consensus is that Q4 is generally the pricier time of the year to be running ads on Facebook.

So does that mean you should stop advertising in Q4?

No it doesn’t!

Depending on the type of business and the products/services you sell, you might want to accept the higher CPM rates or adopt different strategies to navigate this expensive period.

Read on to find out how you can navigate this harsh advertising environment.

Consider extending your experiments

Testing is the open secret to successful advertising. And any seasoned advertiser would have at least one experiment running at any point in time.

For advertisers running experiments during this festive period, understand that consumer behaviour might be quite different compared to the rest of the year. It is advisable to take any experiment results with a grain of salt and consider extending your experiments into January for a more generalisable conclusion.

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Use Cost Cap Bid Strategy

There’s a good chance that you are currently using Lowest Cost bidding in your Facebook Ads. Switching to Cost Cap allows you to continue capturing cheaper leads/customers.

Cost cap bidding strategy allows you to provide Facebook with the maximum cost per acquisition you are willing to pay. Facebook then tries to deliver the maximum number of conversions to you while keeping within your stated CPA cap.

The downside to Cost Cap bidding is that you might not get as much exposure as you’d like. Depending on your business priority, if you might be okay with paying a higher CPA during this time.

Concentrate your entire month’s budget into a short window

For brands selling in-demand products, you could concentrate your entire month’s ad budget into a short window.

By doing so, you would likely be able to outbid competing advertisers to get in front of your audience. Hopefully the increased advertising intensity will motivate your target audience to buy from you.

Do not sell, engage

If you’re a B2B business, chances are your target audience aren’t in the mood to think about work.

This means that those ads soliciting sales aren’t going to be as effective.

One way around this is to promote content with an objective of engaging your audience. You can then retarget them again come January.

Curate content that is relevant, representative, and engaging. The occasional mention about your company/products/services is okay but your focus shouldn’t be on selling.

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Final thoughts

In this article, we explore why ads get pricier nearing the end of the year and what are some ways to navigate around it.

While this article is written mainly for Facebook advertisers, the general strategies and concepts are applicable to other advertising platforms such as Google.

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