Advertising on Threads: Potential CPMs & RPMs

Blog
June 6, 2024 | by Aleesha Jacob
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Meta’s Threads, the text-based social media platform, is expected to introduce ads in the second half of this year, according to industry sources. This move is likely to have significant implications for bloggers who are already exploring the platform’s potential for brand engagement and community building.

Ad Options on Threads

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While details about the ad options are still scarce, industry insiders suggest that the platform will initially focus on in-feed placements, followed by ads within the trends and topics section. This strategy is similar to that of Meta’s other platforms, such as Facebook and Instagram, where ads are integrated into the user feed and topic-based sections.

Here is a table comparing potential CPMs (cost per thousand impressions) and RPMs (revenue per thousand impressions) for ads on Threads:

Platform CPM (Cost per Thousand Impressions) RPM (Revenue per Thousand Impressions)
Threads (Initial Estimates) $5-$10 $10-$20
Facebook $5-$15 $15-$30
Instagram $6-$18 $18-$35
Twitter/X $6-$12 $12-$25
  • Threads (Initial Estimates): The CPM and RPM for Threads are estimated based on its integration with Meta’s advertising ecosystem and the potential for targeted ads. The CPM is expected to be between $5 and $10, with an RPM of $10 to $20.
  • Facebook: Facebook’s CPM ranges from $5 to $15, with an RPM of $15 to $30, reflecting its established ad platform and diverse user base.
  • Instagram: Due to its visually oriented content and strong engagement, Instagram’s CPM is between $6 and $18, with an RPM of $18 to $35.
  • Twitter: Twitter’s CPM is estimated to be between $6 and $12, with an RPM of $12 to $25, reflecting its real-time nature and shorter-form content.

Please note that these are close estimates, and actual CPM and RPM values may vary based on various factors such as ad formats, targeting options, and user engagement.

Threads vs. X: Factors Influencing Ad Revenue Potential

Advertising on Threads: Potential CPMs & RPMs MonitizeMore

Threads’ ad strategy is likely to be compared to X’s, which has struggled with declining ad revenues and a chaotic management style. X’s ad offerings are more limited compared to those of Facebook and Instagram, and the platform’s focus on short-form text-based content may not be as conducive to ad placement as Threads’ more comprehensive features.

Factor Threads (Potential Advantages) X (Potential Challenges)
User Base Significant potential due to Instagram’s large user base and seamless integration Declining user base and negative sentiment due to controversial management decisions
Ad Formats Variety of formats available (image, video, carousel, stories, etc.) Limited to primarily text-based promoted tweets
Ad Targeting Leveraging Meta’s advanced targeting capabilities for precise audience reach Less sophisticated targeting options compared to Meta’s platforms
Content Suitability for Ads The image and video-heavy nature of content aligns well with ad placement Short-form text-based content may be less conducive to effective ad placement
Brand Safety and Reputation Meta’s stronger reputation for brand safety and content moderation Brand safety concerns and negative sentiment due to increased hate speech and misinformation
Advertiser Sentiment Potentially positive sentiment due to established trust in Meta’s advertising platforms Declining advertiser sentiment due to concerns over platform direction and content moderation

Threads’ Ad Revenue Potential to Surpass Twitter/X:

Let’s assume the following for a simplified calculation:

  • Threads’ Monthly Active Users (MAU): 100 million (hypothetical, for illustration)
  • X’s Monthly Active Users (MAU): 250 million (approximate, declining)
  • Threads’ Average RPM: $15 (midpoint of initial estimates)
  • X’s Average RPM: $10 (approximate, declining)
  • Threads’ Monthly Ad Impressions: 50 billion (hypothetical, assuming high engagement)
  • X’s Monthly Ad Impressions: 100 billion (hypothetical, assuming lower engagement)

Calculations:

  • Threads’ Monthly Ad Revenue: 100 million MAU * 50 billion impressions / 1000 * $15 RPM = $75 billion
  • X’s Monthly Ad Revenue: 250 million MAU * 100 billion impressions / 1000 * $10 RPM = $250 billion

To Surpass X’s Ad Revenue, Threads Would Need:

  • 3.33x More Ad Impressions: To match X’s revenue at the same RPM, Threads would need 333 billion monthly impressions.
  • 1.67x Higher RPM: To match X’s revenue with the same number of impressions, Threads would need an average RPM of $25.

While surpassing X’s current ad revenue is a significant challenge, it’s not impossible for Threads. Threads’ potential advantages in user base, ad formats, targeting, and brand safety could be key drivers. The actual timeline for Threads to potentially overtake X’s ad revenue will depend on various factors, including user growth, ad performance, and X’s future trajectory.

Expected CPMs for Advertising on Threads

The expected CPMs for ads on Threads are estimated to be between $5 and $10, which is relatively competitive compared to other social media platforms. Threads’ algorithm-driven feed allows for targeted advertising, which can increase the effectiveness of ads and lead to higher CPMs.

As a part of Meta’s social media network, Threads can leverage the company’s vast user base and advertising infrastructure, making it easier to scale ad campaigns and increase revenue.

Threads’ focus on text-based content may not be as visually oriented as platforms like Instagram, but it still offers opportunities for engaging and creative ad formats, which can command higher CPMs.

Advantages of Threads for Advertisers

One significant advantage of Threads for advertisers is its seamless integration with Instagram, allowing for easy cross-promotion and audience expansion. Additionally, the platform’s text-based format provides a unique opportunity for brands to engage with users through longer-form content, which may be more effective for certain types of messaging.

Besides seamless Instagram integration and text-based content, here are some additional advantages that Threads offers to advertisers:

  1. Leveraging Meta’s Advertising Expertise: Threads benefits from Meta’s established advertising infrastructure and expertise. This means advertisers can leverage familiar tools, targeting options, and measurement capabilities to effectively reach their desired audience on Threads.
  2. Early Adopter Advantage: Brands that start advertising early on Threads can gain a significant early adopter advantage. They can establish a strong presence, build brand awareness, and engage with users before the platform becomes saturated with competitors.
  3. Strong Brand Safety Measures: Meta has a reputation for prioritizing brand safety and content moderation. This is crucial for advertisers who want to ensure their ads appear alongside appropriate and high-quality content.
  4. Innovative Ad Formats: As Threads evolves, it is likely to introduce innovative ad formats that cater specifically to its text-based, conversational nature. This could provide advertisers with unique opportunities to engage users in creative and impactful ways.
  5. Targeted Advertising Capabilities: Threads can leverage Meta’s extensive user data and sophisticated targeting algorithms to deliver highly targeted ads to specific demographics, interests, and behaviors. This ensures that ads are seen by the most relevant audiences, maximizing their impact.
  6. Potential for Viral Reach: Threads’ close integration with Instagram, which has a large and active user base, increases the potential for ads to go viral and reach a wider audience beyond the platform itself.
  7. Real-Time Engagement and Feedback: The conversational nature of Threads allows brands to engage with users in real-time, gather feedback, and build relationships. This can be valuable for brand building, customer insights, and product development.
  8. Cost-Effective Advertising: Threads’ advertising costs are currently relatively low compared to established platforms like Facebook and Instagram. This presents an opportunity for advertisers to experiment and test different strategies at a lower cost.
  9. Community Building Potential: Threads encourage community building and conversation around specific topics. Brands can leverage this by creating engaging content and participating in relevant conversations to build a loyal following and foster a sense of community.
  10. Data-Driven Insights: Threads provides advertisers valuable data and analytics on ad performance, audience demographics, and engagement metrics. This allows for continuous optimization of ad campaigns and better decision-making.

Best Ad Formats for Advertising on Threads

The most effective ad formats will vary depending on the specific brand, target audience, and campaign objectives.

Given Threads’ text-based and conversational nature, here are some ad formats that could be particularly effective and drive more ad revenue on the platform:

  1. Sponsored Threads: These are promoted threads that appear in users’ feeds, similar to sponsored posts on other social platforms. They can include images, videos, or links, and they allow brands to integrate their messages into the natural flow of conversations seamlessly.
  2. In-Thread Ads: These are ads that appear within existing threads, either as standalone posts or as replies to other comments. They can be highly targeted based on the conversation topic and audience, allowing brands to reach users who are already engaged with relevant content.
  3. Profile Takeovers: This format allows brands to temporarily take over a prominent position on a user’s profile page, such as the header or banner image. It offers a highly visible and impactful way to promote a brand or campaign.
  4. Branded Hashtags: Similar to Twitter’s trending hashtags, brands can sponsor specific hashtags on Threads to increase visibility and encourage user-generated content related to their campaigns.
  5. Shoppable Ads: Threads could potentially integrate shoppable features that allow users to purchase products from within the app directly. This would streamline the customer journey and increase conversion rates for advertisers.
  6. Personalized Recommendations: By leveraging user data and preferences, Threads could display personalized ad recommendations that are more likely to resonate with individual users, leading to higher engagement and conversion rates.

Threads’ ad formats are expected to offer several unique features that differentiate them from other social media platforms. These features include:

  1. Targeted Advertising: Threads will leverage its algorithm-driven feed to offer targeted advertising options, allowing brands to reach specific audiences based on their interests and engagement patterns.
  2. Integration with Meta Ads Manager: Once advertising opportunities become available, Threads is expected to be integrated into the existing Meta Ads Manager, providing advertisers with the same targeting capabilities available on Facebook and Instagram.
  3. Cross-Promotion with Instagram: Threads’ integration with Instagram will enable cross-promotion and audience expansion, allowing brands to leverage the user base of both platforms.
  4. Real-Time Signals: The large dataset of users’ text-based conversations on Threads can provide real-time signals for targeted ads, enhancing the delivery of more effective and relevant advertisements.
  5. Interoperability: Threads’ interoperability with other ActivityPub-compatible apps like Mastodon and WordPress can expand its reach and offer more integrated campaigns across multiple platforms.

Potential Challenges of Integrating Ads on Threads

Ad integration on Threads is expected to face several challenges. Ensuring user adoption and engagement before introducing ads is crucial to maximizing ad effectiveness. Limited data and analytics capabilities for businesses will make measuring ad performance and ROI difficult.

The algorithm-driven feed may require targeted and personalized content to resonate with users, which could be challenging for advertisers. Integrating Meta Ads Manager will likely require advertisers to adapt their strategies and targeting options.

Cross-promotion with Instagram may lead to a need for advertisers to manage multiple platforms and ad campaigns simultaneously. Threads’ interoperability with other ActivityPub-compatible platforms like Mastodon and WordPress could lead to complexities in managing ad campaigns across multiple platforms.

Advertisers will need to manage targeting and frequency control across multiple platforms, which could be challenging without comprehensive data and analytics. Ensuring brand safety and moderation on the platform, particularly given the real-time nature of conversations and the potential for misinformation, will also be crucial.

Please ensure compliance with data regulations, especially in the EU, where Threads’ rollout is uncertain. The initial ad format options may be limited, and advertisers may need to adapt to new formats and targeting options as the platform evolves.

Conclusion

Threads offers a unique and potentially lucrative platform for bloggers to reach a new audience, experiment with innovative formats, and build meaningful relationships with consumers. By leveraging its advantages and staying ahead of the curve, brands can capitalize on Threads’ potential and achieve significant success in their advertising efforts.

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