In 2020 fierce competition among election candidates on the local, state, and national levels has led to the highest political ad spends in history, up a whopping 145%.  The dramatic influx of political ads, in turn, drove a sharp spike in CPMs from August to early November (e.g. 70% overall on CTV; 42% on mobile; 57% on desktop).

Post-Election Trends 

After election day, we typically see a drop in CPMs – except in those states facing run-off elections at the state and local levels. However, with the holidays right around the corner and COVID still being considered an unknown as we end the year, CPMs could continue to fluctuate until the end of 2020.  

  • Holiday seasons typically drive a rise in CPMs, but further COVID spikes could depress that rise, especially without any additional government relief for companies. 
  • The pending rollout of a COVID vaccine in 2021 would likely result in a dramatic rise in CPMs as the economy and advertisers aim to get back to pre-COVID levels of business.  
  • The price of CPMs will continue to fluctuate, but will remain at their heightened level until at least the end of the holiday season and runoff elections. 

Long Term Trends 

Fluctuations at the end of 2020 and on into early 2021 aside, Emarketer expects total media ad spend worldwide will rebound to pre-pandemic levels in 2021 to reach $691 billion. Helping drive the rebound will be a boost in digital ad spend globally, at 16.4 percent in 2021—more than double the 7.9 percent growth that traditional media spend will see next year. 

  • Forrester Research predicted the focus on retaining customers will drive a 40% lift in the marketing messages that consumers receive, especially through direct channels like email and mobile messaging. 
  • Consumer brands next year will see a shift toward localized, automated, and retention-based marketing as the pandemic continues to impact their strategies.  

 How do you combat rising CPMs? 

  • Fine-tune targeting to minimize waste, look hard at performance by segment.  
  • Implement A/B testing of new audience pools to ensure optimized performance.  
  • Evaluate the data sources used to drive audience selection and consider opening the pool to new data providers to expand reach while ensuring limited waste.  

 

Want to learn more about how we predict fluctuations to benefit ad spend, email us at info@wataugagroup.com or call at 407-982-2696.  

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