Ecommerce ad trends & observations
[Week 30th March - 5th April]
Written by Will Ashton
6th April, 2020
It’s been more than a month since the biggest drops to ad performance, so we’re able to see some better-established trends across our Facebook portfolio and the rest of the market.
We’ve found that paid social is out-performing search, and more opportunities have come from lower CPAs, however, concerns about supply chain resilience have curtailed increases to spend.
Each week we pull together the most relevant trends, observations, and strategies to help ecommerce businesses identify opportunities on Facebook, and make well-informed decisions.
Top-line summary
Ecommerce businesses have seen more opportunities on Facebook for lower CPAs, driven by higher inventory and lower advertiser demand.
Paid social is outperforming search. While Google search ads perform significantly worse than previous benchmarks, Facebook ads are performing at close to normal levels. Meanwhile, search traffic is down 25%, while 45% of people spend more time on social media.
However, among these better-performing sub-verticals, the biggest impediment to spending more on Facebook is concerns around the resilience of supply chains, warehouses, and fulfilment to the crisis.
Online sales in general are keeping their head above water among sub-verticals that have not seen the biggest decreases to spend. Meanwhile, insights from China show that the country is beginning to recover.
Trends
- Spend is up 7% week-on-week but still 45% below pre coronavirus levels. Anecdotally, the biggest blocker to spend for sub-verticals where performance is holding up is impact on (or fear of impact on) suppliers.
- Global CPMs have risen by 15% since the crisis first hit.
- Clickthrough Rate is up 10% on the previous week, but is still far below pre-March levels.
- Conversion Rates are up 13% each week and were particularly strong at the start of last week. However, over the past couple of days, it has seen its most significant decrease.
- Global CPA is around 10% lower than the previous week and still significantly down versus pre-coronavirus levels, though shows signs of increasing.
Other industry findings
- Good roundup from Business2Community of the major macro effects in ecommerce. The headline is that being that fear of inventory and supply shortages is the major factor impeding ecommerce growth
- In the UK 33% of people are spending less online, 16% are spending more. In Germany, the numbers are 20% and 15% respectively. That sentiment has improved over the past two weeks, which is encouraging. These figures come from YouGov, shared by Facebook
- 45% of people are spending more time on social media, according to the Global Web Index
- Time spent on search is down, while time spent viewing Google’s Display Network and YouTube is up, according to a Wordstream article
- 99% of industrial business in China have resumed operations, 3 months after the initial outbreak, according to BCG
- Statista data suggests that consumers are shifting online far more quickly in CN and US than in the UK and DE
- Analysis on the fashion and luxury brand sector from BCG predicts that sales will bottom out in March/April and will rise to be 10-15% down year-on-year in December
- Growth rate in online sales in US has doubled over the past month, however some sectors are struggling. For example, apparel is down 13% in the two weeks to March 25th vs from February to March 10th.
Findings on supply chain & fulfilment
- US-focused analysis from Digital Commerce 360 of what logistics service providers are doing to keep orders moving
- Vogue Business has put together insights on challenges and potential solutions to supply and fulfilment challenges
Search and Social findings
- Mobile search traffic is down by 25% in March according to Wordstream, while people at home are accessing internet on non-mobile device
- However, Global Web Index reports that 70% of people are spending more time on their smartphones
- This appears to corroborate data from Within that suggests that Google is performing significantly below previous benchmarks, versus Facebook which appears to be close to normal levels
- However, eMarketer reports that advertisers in the US expect social to be hit worse by budget reductions than search
- Search behaviour is changing and conversion rates are impacted, particularly at night, acccording to Wordstream
- Some insight into performance on search by vertical from Wordstream
Creative Strategy findings
- Within recommends taking a Black Friday/Cyber Monday approach to discounting and sales but research from Kantar shared by Facebook say that only 30% of consumers want offers and discounts, which is significantly lower than usual.
- Creative research shared by Facebook shows a 27% reduction in ads showing social interaction imagery. Imagery and words around fitness and health are up 400%, and 33% of ads are now showing people using electronic devices.
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.
Useful Links
- Within Retail Pulse: This is US-focused but provides helpful insights and is updated with new data daily
- Analysis of long-term consumer behaviour change as a result of coronavirus
- Analysis of impact on recessions on brands and advertising, suggesting that rather than “going dark” advertisers should look at refining their messaging.
Share on facebook
Share on twitter
Share on linkedin
