• December 3, 2020
  • By Brian Bowman, founder and CEO, Consumer Acquisition

For Mobile Ad Advertisers, 2020 Will Have a 5th Quarter

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It’s an understatement to say that the 2020 mobile app advertising market has been unique—from COVID causing a surge in mobile app usage and a decline in advertising CPMs from March through June, to Apple’s identifier for advertisers (IDFA) removal announcement in June, to the September launch of Facebook’s Automated App Ads (AAA), to the recent massive spike in Facebook 2020 election spending. This year has been full of tremendous change, and we’re not done yet.

Every year about this time, we publish a post discussing how to maximize your Q4 app ad budgets (here is our 2019 post). This year, we aren’t talking about Q4, we’re talking about Q5 2020. Q5 refers to the 10-day period starting between the last Amazon shipping day before Christmas through New Year’s Eve, in which retail and e-commerce pulls back on their marketing budgets and other mobile app advertisers can take advantage.

The 2018 graph below represents a normal year. CMPs spiked 30 to 40 percent between Black Friday and Christmas and then dropped around Amazon’s last ship day.

2017 vs 2018 were similar (note: we pulled back more in 2017); CPMs spiked 30 to 40 percent between Black Friday and Christmas and then dropped around Amazon’s last ship day.

Below is a cluster of 2019 mobile app advertisers. Notice the large CPM increases between Black Friday and Christmas and then the drop in costs for what we are calling “Q5.”

Q5 2020: Here’s Our Take

1. User acquisition in mobile app advertising will be fiercely competitive, but pricing should be less volatile in late December. COVID-19 has significantly reduced foot traffic in stores throughout the year, and we anticipate this will accelerate the move to online advertising for retail businesses for the holidays. E-commerce brands we’ve spoken to appear locked and loaded to go bigger sooner and advertise as long as possible on Facebook and Google this holiday shopping season to make up for the loss of foot traffic.

Volatility may be more evenly distributed throughout November and December versus the mad dash that traditionally kicks off with Black Friday shopping and runs until a few days before Christmas. If people aren’t coming into stores, why should retailers wait? Why not start special offers after the election?

To capture this opportunity, we’re advising mobile app advertisers to plan their budgets and creative production carefully. Advertisers should produce holiday creative early to capture a potentially extended online shopping season, and they should also bulk up production and testing to capture CMP drops related to Q5 (eg., the post-holiday CMP hangover).

2. Mobile app advertisers should have their biggest November/December / Q5 ever. Due to this unprecedented holiday season, e-commerce will give it everything they’ve got between Black Friday and Christmas and then pull back severely after December 22. This effect will be felt more significantly in 2020 due to the overwhelming amount of first time e-commerce spenders forecast to be participating this year and thus pulling back near Christmas. This year more than ever, mobile app advertisers should be ready to capitalize on an influx of ad inventory primed for non-e-commerce shopping. We’re advising gaming, entertainment streaming apps, meditation and fitness apps, DTC, and others to get ready.

3. Travel industry demand will flow into other verticals instead. The travel industry has been hit extremely hard in 2020 by global quarantines that started in March and show no signs of slowing. Holiday gatherings this year are advised to remain small and travel discouragement is causing travel advertisers to forecast a low spend season. This poses an additional opportunity for mobile app advertisers to reach millions of people staying home, finding gaming, entertainment, and health and fitness as a means to “escape” or enhance their at home time.

4. People are much more likely to connect more this holiday through shared experiences via social sites vs in-person traveling. Gaming with friends has never been more important. We expect that social platforms like Facebook, Google, and TikTok that offer a way to play and engage with friends and family will continue to surge through the winter season and well into 2021.

Brian Bowman is the founder and CEO of Consumer Acquisition. He has profitably managed over $3 billion in online advertising spend and product development for leading online brands, including Disney, ABC, Match.com, and Yahoo!

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