Here’s Why Your Facebook Ads Are Going To Tank In Q4
With an election on the horizon, holiday shopping underway, and a struggling economy, the pressure to secure a strong Q4 has never been greater—and more difficult to achieve. It’s no secret that for most advertisers, Facebook performance has been troublesome since March, when the platform removed crucial metrics that many of us relied on to optimize performance.
Now, just as everything seems to be returning to some semblance of normalcy, Facebook performance may be on track to take another hit. In this article, we’ll discuss what’s on the horizon for the fourth quarter, how it will impact your campaigns, and what you can do to ease the pressure.
Election Outcome Impacts
Traditionally, the months following an election cycle are filled with optimism, breathing new life into our economy. With an uptick in spending and profits for companies, many businesses anticipate successful performance during this time. However, 61% of consumers believe their finances will be negatively impacted if their candidate loses.* While it might seem that the optimism of the majority whose candidate won will outweigh the negative outlook of those who did not, there is one important exception.
When elections are too close to call, and the period following Election Day is filled with recounts, it ignites a sense of uncertainty that negatively impacts the economy and, consequently, paid ad performance. According to the Pew Research Center, 81% of voters say the economy will be very important to their vote in 2024, up from 79% in 2020.* The last time we saw the economy play such a crucial role in an election was in 2016, when the average spend per household was $57,311.* Since then, however, the average cost of food and housing has increased by 36%, placing exceptional economic pressure on Americans.
The election between Trump and Harris has been heated, with polls showing both candidates neck and neck. If the previous election in 2020 is any indication, we’ll likely see a dip in performance lasting through the inauguration and potentially beyond.
*Sources: Sourcing Journal , Pew Research Center , US Bureau of Labor Statistics
Holiday Consumerism
As we head into 2024, household debt has hit record highs, which is likely to impact holiday spending.* While some sources estimate growth in sales, many agree that if growth occurs, it will be modest. Last year, we saw the year-over-year growth percentage for holiday sales decrease, while actual sales per household increased by only 4%.* Based on the growth seen in 2017 and 2021—both following election years—it may take a full year before we see another significant uptick in holiday spending.*
But what do these spending trends have to do with those of us gearing up to advertise on Meta this holiday season? With Meta users increasing by 7% year over year*, the opportunity is there for advertisers savvy enough to capture it, but it won’t be without risk. Companies like Macy’s, which are desperate to continue surpassing earnings goals after fading to near irrelevance, and Target, whose third-quarter earnings were rather disappointing, are spending heavily this holiday season. As a result, CPMs are likely to see higher growth than usual.
Meta has long been a mid-funnel performance channel that businesses of all sizes have relied on, but this year may mark the first of many in which it becomes too expensive for the average business to achieve a successful return. While empirical data on the exact number of advertisers actively promoting on Facebook is unclear, anecdotal evidence suggests that many smaller businesses are moving away from the platform in favor of stronger returns elsewhere, such as on TikTok.
*Sources: Statista , National Retail Federation , Statista , Market Watch
Overall Campaign Volatility
For you, things may be different. You have a strong paid social team that has driven returns throughout this year, and you expect that to continue. However, this period has been relatively stable for most advertisers, leading some to believe it might just be the calm before the storm.
Many Facebook marketers look back at June 2022 with apprehension. However, the strongest among us were able to weather that storm and recover performance to pre-iOS 14 levels. The optimism we felt coming out of that performance dip may fade, as the challenges in Q4 could be even more difficult to overcome—especially since this period is crucial for many brands.
How You Can Maintain Positive ROI
For those advertising on Facebook, price competition will be heated this holiday season. Brands that can compete on price should absolutely leverage this to their advantage. Comparison ads that demonstrate value relative to competitors are predicted to perform exceptionally well.
Other brands that may not compete on price should emphasize how their products fit into consumers’ lives and highlight the quality that justifies the additional spend, potentially saving money in other areas. For example, mid-priced clothing brands should promote the durability of their clothes and how they can be worn across multiple seasons, unlike fast fashion.
For brands that can no longer achieve a positive ROI on Meta platforms, a change may not only be warranted but necessary for maintaining profitability. At Media Proper, we constantly urge our clients to test diversification; this is the only way brands marketing on Meta will survive Q4.
E-commerce businesses that have yet to explore product listing ads are falling behind and need to catch up quickly. For B2C companies, this means using product listing ads not just on Meta, but also on platforms like TikTok and Pinterest. Companies in the home care sector may find success on Houzz or Nextdoor, while B2B brands might achieve better results on LinkedIn and even Reddit. Companies that have relied on Meta for over a decade need to start testing other platforms to see growth in the coming years.
Partnerships with third parties and influencers will also be crucial. Working with agencies that can guide you through expected ROI has never been more important. Whether it’s a consumer blog helping you understand the value of each placement or an influencer guaranteeing a certain number of views, seek out partners who grasp the value of advertising and are realistic about their returns. The time to take measurable risks is now.
Brands that have deprioritized SEO will need to dive in headfirst. While this may not save you from a challenging Q4, a strong SEO strategy can set you up for success in the new year. Keep in mind that search goes beyond Google; it includes platforms like YouTube, Pinterest, and TikTok. Having a skilled SEO marketer on your team, who understands how to optimize content across different mediums and platforms, will yield small wins in Q4 and help you grow into a strong and sustainable 2025.
Don’t let the grim prospects of the election and holiday season stifle your potential for a successful Q4. Diversify your marketing strategy and start testing beyond Meta. Ensure you partner with an agency that understands the external pressures impacting your brand’s performance, and work together to achieve a positive ROI in Q4 and beyond.
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