B2B’s Just Want to Have Fun, How to Win This Q4, and Introducing Virtual Commerce

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This year's holiday shopping season is projected to reach unprecedented levels, with eMarketer forecasting a 9.5% year-over-year growth in eCommerce sales—a rate of increase not seen in the past two years. This marks the largest share gain for holiday eCommerce since 2020.

While this surge presents exciting opportunities for marketers, there are key nuances to consider in order to fully capitalize on the upcoming season.

1. Much of the shopping, especially by the younger generations, will be done using buy now pay later.? A new survey by Afterpay showed that 30% of consumers are considering using BNPL to stretch their budget further this year, with millennial parents and GenZ saying they are more likely to consider BNPL than other age groups.? Additionally, half of all shoppers say they will only buy from brands offering free shipping, highlighting ongoing financial pressures. Brands should adapt by providing flexible payment options and ensuring consumers feel they are getting value, whether through BNPL, free shipping, or other cost-saving incentives.

• Mobile is set to dominate holiday shopping, with over half of online sales coming from mobile devices. ? Within mobile, video and social commerce are key, as short-form videos influence 53.7% of US social shoppers, and 75.7% complete their purchases directly on social platforms.? Gen Z, in particular, is driving this trend—60.7% of 18-to-24-year-olds will be social buyers in 2024, rising to nearly 65% by 2027. With 55% of Gen Z having made a social media purchase in the past six months, brands must prioritize social commerce to capture this generation's attention and loyalty. To say that social media and short-form videos are the channels you have to win is an understatement. Other than social, short-form video, and social commerce, ensure you double down on mobile optimization and look into new mobile-first channels, including SMS.??
• This leads us to our last point, which is - that GenZ is driving the growth.? Nearly 90% of the 14.7 million new digital buyers between 2024 and 2028 come from this generation. Over half (55%) of US Gen Z consumers have made a social media purchase in the past six months, compared to 38% of all shoppers. Gen Z is almost 42% more likely than the average consumer to buy holiday gifts directly through social media this year. The rapid growth of Gen Z digital buyers will peak between 2024 and 2026, making the next few years crucial for brands to capture their loyalty.??

With social media expected to drive most shopping growth this holiday season, Meta is obviously at the forefront of trying to ensure advertisers spend on much as Meta as humanly possible.? In order to enable that they have unveiled new advertising tools.?

1. Show ads to people most likely to shop in stores and highlight store locations close to the user so shoppers can easily plan their next visit.?Omnichannel retail is the future, and integrating online and offline is high on the priority list of most sellers. Personalizing messaging based on users' preferences (in-store vs. online) takes omnichannel personalization to the next level.??
2. Showing ads to people interested in a specific location, helping brands reach tourists, shoppers, and visitors in their city or region.??
3. The ability to highlight promo codes in ads makes it easier for Instagram and Facebook users to apply discounts.? Amid rising competition and economic pressures, retailers have increased promo code usage by 31% , with nearly 70% of Americans saying these discounts make them more likely to buy. With the growing reliance on promo codes as a key incentive for purchase, highlighting them and drawing attention to them more effectively should increase ad effectiveness on Meta.??
4. The ability to add multiple landing pages to a single image or video ad will help people more easily navigate to the content they're most interested in,?allowing for a better and more personalized user experience that will undoubtedly increase conversion rate.??

Now, let's move on to some changes on some of the more fringe social media platforms.??

Snapchat:? Snapchat will start experimenting with placing sponsored messages next to chat threads from friends.? These "Sponsored Snaps " will appear as unread messages in Snapchat's main Chat tab, sitting above messages from contacts.? This is the first time Snapchat will show ads in the most used part of its app and is undoubtedly in response to the increasing pressure Snapchat is facing to expand revenue opportunities, especially focused on lower funnel performance opportunities.? While consumers may find these vaguely annoying, advertisers are anxious to get into this heavily guarded inventory and should pique some interest.? Outside this new ad unit, they have also made several other updates, including updates to the lead generation suite and new bidding capabilities for mobile first and e-commerce brands.? That's all to say: keep an eye out for what Snap has been up to, and ensure you continue to test its offerings and new ad units.? Nearly two-thirds of Snapchat social shoppers buy at least one product per month on the platform. In comparison, just over one-third of Facebook social shoppers do the same.??

Reddit:? Reddit was the fifth highest-visibility domain in Google's organic search results in July 2024, up from No. 68 in July 2023, according to Sistrix . Reddit is also one of the few social platforms improving user engagement, with monthly time spent increasing from 215 minutes to 243 minutes, reflecting the appeal of the niche communities that Reddit fosters. As third-party cookies become less prominent, Reddit is a powerful platform for contextual targeting due to its niche community.? No doubt that advertisers are seeing this growth and investing more heavily, as Reddit reported a 41% YoY growth in online ad revenues due to its new ad product focus, among other things.? Despite capturing 7.8% of time spent per day with social networks by US adults, Reddit generates just 0.9% of social network ad spending .? ?It's definitely underinvested in and for a variety of reasons. However, this is one platform you should keep your eyes on with strong user engagement, an active community, and robust targeting - there will be a future here for most brands.??

Now, let's move to the other major channel - search.??

Perplexity is hoping to capitalize on the increased interest in AI search to move some dollars away from Google and to itself.? They announced that they would officially launch an ad product in Q4. New Perplexity ads will show alongside queries, allowing users to view and engage with ads alongside moments of research and intent. For reference, Perplexity processes more than 230 million queries globally per month, which is a strong start even though compared to Google, which processes something around 100 billion queries a month, it seems like peanuts. Perplexity emphasizes its highly educated and affluent users, with 82% and 45 holding undergraduate and graduate degrees, respectively.

Additionally, 30% of its users are in senior leadership roles, making it an attractive platform for advertisers targeting a professional, high-income audience. With advertising, Perplexity CPMs will be north of $50, which could be a hard pill to swallow with display ads on desktop normally having CPMs of around $2.50 for static ads and video ads having a CPM of $11.10.? While the highly contextual placement and the hard-to-reach affluent audience are in their favor, I assume most brands will wait until there are performance benchmarks to justify those high prices or for the prices to normalize a bit more.?

And while Google may be slightly concerned about Perplexity, the fact of the matter is that Google will still be a dominant force this year and will be for the next several years.? In addition, its ad integration with AI overviews makes it a much easier lift for advertisers to activate vs. moving money to Perplexity.??

If Google is to worry about anything, it should be more concerned about the rise of the search budget moving to retail media.? Google's share of search ad revenues will dwindle to just slightly over 50% this year, down from about 55% two years earlier, with retail media search set to capture the majority of new search ad dollars over the next few years.? Amazon is the behemoth in this category, but don't count Walmart out, as they are a (distant) second to Amazon.? Walmart will account for nearly 4 in 10 non-Amazon retail media search ad dollars this year—more than any competitor. That translates to $2.42 billion in search ad revenues.? Walmart continues to widen its lead against other retailers (i.e., Target) and is well-positioned to capture increased dollars this year. For marketers, this shift means it's no longer enough to focus solely on Google for search ad strategies. With retail media platforms, especially Amazon and Walmart, capturing an increasing share of search budgets, brands must adopt an omnichannel approach. Diversifying into retail media search will be key to reaching consumers throughout their shopping journeys as Walmart strengthens its position and grows its influence.

Move over social commerce - it's time to introduce virtual commerce.? Roblox announced updates to its e-commerce and advertising offerings at its annual developer conference. Starting in 2025, Roblox will allow all creators and brands to sell real-world products through virtual storefronts. Roblox is pursuing e-commerce partnerships, and it named Shopify as its first integration.This means developers, creators, and brands on Shopify can sell directly within their Roblox games. This partnership could be a game-changer for Shopify. Competing with Amazon has been a challenge, but by integrating with Roblox, Shopify can tap into a younger, highly engaged demographic. Brands now have the opportunity to immerse their products in an interactive, virtual world where users can not only engage with them but also make direct purchases. It’s a unique way to introduce physical products to Gen Z and beyond, providing an entirely new touchpoint in the buying journey. Marketers need to rethink their approach to e-commerce. This shift opens the door to virtual experiences where shopping becomes more engaging and social. Brands that integrate with platforms like Roblox will be able to blend entertainment with shopping, making it critical to develop immersive experiences that resonate with younger audiences. If you recall, at the top of the newsletter, I discuss how these younger generations are what is driving the growth of e-commerce. Marketers should start exploring how to position their products in these virtual environments now to stay ahead of the curve.

Now, a bit on B2B.? I don't talk about this nearly roughly, considering how much innovation is happening in the space.? A report by LinkedIn and Magna revealed that most B2B buyers are hungry for a different kind of B2B ad.? 64% of business decision-makers say B2B ads lack humor, and 60% say they lack emotional appeal. However, when B2B ads can hit those notes,? they increase brand favorability, purchase intent, and purchase consideration.? As the B2B market gets increasingly competitive, we need to steer away from the dry ads of old and realize that business decision-makers are just people and, like all people, they like to be entertained.??

Finally, You may have noticed some volatility in your rankings, and that is due to the August Core update .? Google's official statement is that the update's goal is to surface content useful to humans and not just search engines.? However, unofficially, this update is to right the wrongs of the previous helpful content core updates, where many websites saw huge losses in traffic. For brands, by the end of this month (September), you should have a good sense of what your new baseline is. However, remember that the name of the game for Google will continue to be content written by humans for humans.

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Check out my Podcast, where Libby Rodney and I discuss how Gen-Z's consumption habits are reshaping markets, the rise of "Junkflation" and its impact on perceived value, and the growing influence of review culture on purchasing decisions. You can watch or listen here .

Megan Conahan is a 19-year veteran of the digital marketing industry. Over the last 19 years, she's consulted with Fortune 1000 brands on negotiating the ever-changing demands of the digital marketplace and creating unique solutions to set them apart. Megan is an EVP at Direct Agents, an independent and minority-owned digital marketing agency. If you want to chat about marketing support or just talk shop, please message me or email [email protected] !