Is adspend recovery in Asia sign of good news to come in the West?

A recent surge in adspend in East Asia could give an indication of how a similar rebound could happen in Europe and the US when the coronavirus pandemic subsides, according to new research on social media spend.

A new report by Socialbakers found adspend on Facebook and Instagram has increased by 21.5% since the beginning of March in East Asia, where brands and agencies have started to recover from what is believed to be the most stringent social-distancing measures to deal with the pandemic.

Many ad agencies' China offices returned to more normal working conditions at the end of March, such as McCann, after a range of lockdown measures were imposed in the country in February.

Every other region has seen a decline in spend since the beginning of February – most precipitously in North America.

This fall in spend has coincided with a dramatic fall in digital ad inventory, resulting in significantly lower cost-per-clicks, as Campaign reported last month when lockdown measures were first imposed by the government in the UK.

Socialbakers’ research showed that brands’ CPCs on Facebook dropped by 31% in the last full week of February (from $0.13 to $0.09).

While most industries traditionally have their lowest CPCs right after the post-Christmas period in the new year, a sharp decline in specific sectors’ CPCs has dragged them down further, with examples including accommodation (down 31% to $0.057) and services (down 34% to $0.107).

Meanwhile, airlines are by far the most active business sector when it comes to communicating on social media about coronavirus, as millions of social users scramble to get answers about flight and travel information.

The study found that airlines had the highest percentage of active pages on Facebook and Instagram – a measure of how often they post about coronavirus, as well as garnering interactions with users. Airlines were followed by the finance, telecoms and gambling sectors.

Socialbakers also reported that Facebook is seeing three times as many posts about coronavirus as its sister picture-sharing platform Instagram, suggesting Instagram is a "safe haven", while Facebook is a go-to for news updates.

Yuval Ben-Itzhak, chief executive of Socialbakers, said: "Uncertainty about the economy and an increase in user engagement means brands are decreasing their adspend and increasing their use of organic content. It’s more important than ever for brands to understand their customers and the kind of content that will resonate with them.

"Also, we’re seeing lower ad costs across many Covid-19-affected regions, which presents an opportunity for brands to share their message with a wider audience for less budget than usual."