Meta ad prices dropped for the fifth consecutive quarter year-over-year. How is that possible? Here are five potential explanations…
1. User Growth. While users grew only 5% year-over-year, it still helps increase inventory.
2. User Activity. Amazingly, DAU vs. MAU hit an all-time high in the first quarter of 2023.
3. More Ads Shown. The most popular and controversial theory is that Meta is trying to squeeze more ads into the news feed. It’s possible, but difficult to prove.
4. Placements Added. Meta added a few placements during the past year which would have increased inventory.
5. Formerly known as Automatic Placements. When you utilize Advantage+ Placements, Meta will automatically optimize which placements are used and when to get you the most results for your budget. More. An increased willingness of advertisers to use secondary placements likely helped keep costs down.