Question
ABC analysis has likely been affected by the increase in online ad spending as it would have to adapt to the changing costs and trends in online advertising. For instance, the cost of impressions for ads on platforms like Facebook has increased, which would affect the categorization of inventory in ABC analysis. The increase in online ad spending could lead to a shift in the A, B, and C categories, with more items falling into the A category due to their higher value and cost.
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Since the pandemic accelerated online spending to $26.7 trillion in 2020, the average starting cost of 1000 impressions for a Facebook ad went up with it. For example, the average starting CPM in 2019 was around $5.12, but by May 2020, it had risen to $7.19. In October of 2021, Facebook's average CPM is $11. Now compare that to TikTok, which brings in $1.3 billion in annual ad sales. In 2020, Facebook generated around $84 billion. In fact, for every one dollar per user TikTok makes, Twitter makes five, YouTube makes seven, and Facebook and Instagram make nine.
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