Ecommerce ad trends & observations
[Week 6th - 12th April]
Written by Will Ashton
13th April, 2020
Last week held a mixed bag for ecommerce companies, as we started to see which businesses were doing well, and received more data on how consumers have started to respond to the crisis.
As many companies continue to make preparations for a longer period of muted sales, several studies look back at 2010 to see which businesses managed to grow in a recession, and why.
With some companies today performing far better than others within their vertical, it’s more than likely that an ecom’s strategy is now more responsible for their results than just market forces.
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.
- FB costs broadly flat but non-US conversion markedly up and CPA’s markedly down
- There remains significant opportunity due to low costs on both FB and wider media landscape
- There is a significant pull back of ad budgets across all verticals, consumers are expecting brands to advertise and research shows that those who don’t market during a recession will lose ground on their competitors
- People are still buying online, in some instances are spending more (millennials in particular)
- Huge split in brands reporting increased and decreased sales suggesting that strategies/tactics rather than market forces per se are a big driver of performance
- Brands who do advertise need to be highly sensitive in their messaging – strategy here could make or break relationship with customers
- Majority of retailers reporting or expecting supply chain issues
- Spend is up for second straight week and at a faster pace (13% vs 7%)
- Global CPMs are very slightly lower than last week (down 5%)
- Global CTRs are very slightly improved over past 7 days (up 5%)
- Global conversion rates are up 20% week-on-week. EU is driving this significant change in performance; US is flat
- CPAs are down 20% week-on-week, with similar geographic drivers to conversion rates
- A little old (Mar 27), but some pertinent stats on media spend from IAB. From sample of 400, 24% of respondents from sample of buy-side decision makers have paused all advertising for Q2. In the near-term digital spend is 33% down.
- Facebook ad revenues are going to take a large hit despite significant rises in usage. Suggests CPMs will stay low for some time.
- There is a big split between brands reporting increased and decreased sales. There is no one rule and this is true across multiple sub-verticals. This shows that to a large extent your strategies are going to dictate your success.
- In the same article, apparel sites reporting higher conversion rates and more efficient ad spends (April 3-5)
- Interesting insight into 5 sub-verticals that are thriving through referral traffic (gifts, health & fitness, food & drink, home & garden, beauty)
- Some good news; eMarketer are predicting that DTC US sales will rise to $18BN in 2020
Marketing during a recession
- Harvard Business Review article on advertising during a recession from 2008. A few very salient points here, very applicable today, particularly on distribution and messaging.
- A modern day version (which annoyingly went behind a paywall), again highlighting the marketing-related opportunity and risks thrown up by a recession. Highly recommend reading this one.
- Shopify’s insights on the same theme has some good tactics drawn from DTC brands that thrived in the 2010s
- There is very little expectation that brands should stop advertising (only 8%) and Kantar reports a six month absence from TV will result in a 39% reduction in brand awareness. There are also interesting insights as to consumers’ expectations around messaging.
- Opinion piece in Campaign positing that post-CV, ecommerce is likely to accelerate at a faster pace than before
- Opinium research shared by Facebook (Mar 26): Over 50% of people are comfortable with hearing more or normal amount from brands in every category surveyed (Retail 70%, Fashion and Beauty 53%)
- Shared by Facebook: there is a 918% YoY increase in Instagram posts including the word “bored”. Begs the question of how can brands reference this/tailor their messaging accordingly
- Edelman research shared by Facebook shows that 25% UK people are trying new brands because of the compassionate way they responded to the virus. The same study showed 74% of people in UK would lose trust in companies that put profits first. 64% of people said that brands’ response to crisis will have an impact on likelihood they will buy from that brand in the future.
- Examples of strong editorial content for email campaigns from Nest’s partner Ometria, many of which could be applied to social too.
- Short piece in Logistics Manager on the long-term effect of CV on supply chain and changes that it will trigger
- 47% of apparel retailers reporting issues with supply chain, 22% anticipate problems in next few weeks, according to a study from Klaviyo
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.