The eCommerce trends we've noticed over the past weeks & how to address them
Written by Will Ashton
24th March, 2020
The volume of eCommerce companies we work with puts us in a good position to provide you with insight into what we see happening in the market , especially in the Facebook and Instagram ecosystem.
Overall we’re seeing declining spend, but encouragingly, opportunities appear to exist – at least to an extent.
We’ve pulled together a few macro trends and observations, share some of the strategies that we have been seeing success with, and provide a list of useful links for further reading.
- Global CPMs for eComm are down by around 50% since the start of the month. However, they may be on the rise again. Last week we saw the first day-on-day rise since Feb 27.
- Global CPCs have also been dropping, but not quite as dramatically. They have been relatively stable since March 14 but are about 33% down since the start of the month.
- Conversion rates dropped every day between March 5 and 15. They started to rise again on Tuesday and Wednesday but dipped again yesterday. Currently they are around 20% lower than the average we observe.
- For some advertisers, the decline in CPMs has been greater than the decline in conversion rates. This translates to lower average CPAs across our portfolio.
- The economy has taken a hit, and as expected, several affected advertisers in the travel and hospitality sectors are pulling ad spend from all their channels, including Facebook. These conditions should lower prices for Facebook inventory.
- Because consumers’ ability to spend offline is severely curtailed, many people will have money available to spend once confidence begins to return.
- Consumer confidence is low, so more “affordable” product lines, especially those in household and convenience segments, could fare better than those at the higher end
- If fulfilment and supply can withstand the pressure (we appreciate that’s a very big “if”), there could be an opportunity for many eCommerce brands.
The pandemic is global, so advertisers should think global. For those who distribute globally, worldwide campaigns or campaigns with larger country groups will help weather the effects of change within individual markets.
These campaigns will also take advantage of broader reach and lower cost CPMs. Advertisers we have tested this approach with have seen an 80%+ increase in ROAS in the first week of testing.
Rethink your Messaging
You may need to rethink your messaging. Consumer behaviour has change dramatically, as more people spend more time at home and more time online.
People are turning to their smartphones to keep themselves occupied at home, so finding ways to engage them and speak to their current mindset will help improve your chances of conversion. You can do this by making connections with the things that are front of minds such as family, social interaction, health and hygiene.
Some may have concerns around delivery, so it’s important to try to make deliveries easier – or free, if possible.
It may also be a time to test strategies designed to generate interest, banking up new user pools ready to convert at a stage when things are moving out of this difficult period and back to normal.
Test New Channels
With CPMs on the decline across most ad platforms, there’s a great opportunity to test the waters on channels that may have been considered but not yet tested.
Try repurposing some of your Instagram stories into Snapchat Ads. These two ad formats (amongst others) are very similar and can be an easy way to try engaging an incremental audience as lower competition helps boost initial results.
What works on paid social is changing quickly. The Nest team is completely dedicated to growing ecommerce businesses with paid social, so we’ll help your campaigns keep up with the state of play.