By Brian Holmes, Franchise Ramp CEO  

2020’s holiday season brought both new challenges and opportunities for franchisees and their marketing goals. In this Franchise Ramp Trendline Report, we take a closer look at how digital marketing faired in Q4 and which marketing lessons to take with us into 2021. The graphs below are a representation of over 400 franchise locations across the country, primarily in the fitness space.

This Trendline Report highlights include:

• ‘The 5th Quarter’ CPL Cost
• 2020 Election/Holiday Advertising Results 
• January – March 2021 Digital Marketing Expectations 

‘The 5th Quarter’ CPL Cost

Facebook references the 5th Quarter as the time between December 26 — December 31, 2020.

The graph features a drastic drop in CPL starting on December 26th, moving from an average of $18 per lead to $12 per lead overnight. There was a slight increase in CPL closer to the end of the year in preparation for New Year’s Eve celebrations.  This is the lowest CPL costs we’ve seen since early October.

Holiday/Election Advertising Results   CPM Cost (7/15/20 — 1/7/21)  The graph below shows the Cost Per 1,000 Impressions (CPM) between August 15, 2020 — January 7, 2021.

A CPM campaign’s objective is to impact as many people as possible. It is used to promote brand engagement and the advertiser pays for every 1,000 impressions, that is, every 1,000 times the ad has been viewed.There was a spike in CPM cost the month leading up to the election, then an immediate drop following November 3rd. Why? Political advertisers spent roughly $1.4-2 billion in digital advertising leading up to the election, increasing competition on platforms like Facebook and Instagram. 47% of people didn’t plan to shop major events (like Black Friday). This means an extended season of online shopping, prompting CPM costs to rise across the board due to increase competition.

Holiday/Election Advertising Results (cont.)  CPL Cost (7/15/20 — 1/7/21)  The graph below shows the Cost Per Lead (CPL) between August 15, 2020 — January 7, 2021.

There is a direct correlation between CPM and CPL. When CPM rises, it means that it becomes more expensive to show ads to consumers. If your budget doesn’t increase while CPM increases, you are showing to fewer people, which then gives you fewer conversion opportunities.Look at your advertising results during the time outlined on the graph above. It’s almost guaranteed that you see the same fluctuation with your CPL as you see with the CPM (depending on market).

Looking Forward in 2021: Last Year’s Results CPM and CPL Costs (12/1/19 — 3/8/20)  The graphs below shows the Cost Per 1,000 Impressions (CPM) and Cost Per Lead (CPL) between December 1, 2019 — March 8, 2020.

Note how both CPM and CPL drop during ‘the 5th Quarter’, rising slightly in late January. CPM and CPL drop in February and early March due to a resurgence of resolutioners.  Our expectation during this first quarter is that we expect to provide good results with some fluctuations. If you study and understand the CPM/CPL graphs above, you can predict those fluctuations as well and be prepared for them. During the time when CPM is up, have a plan of increasing budget a little to close that gap. During the time when CPM is down, be ready to work and close as many leads as you can. Treat this first quarter like it is your Super Bowl. Be Prepared, Play the game, and WIN!