A new year, a new landscape for ecommerce

It’s a new year – and a new landscape for ecommerce. The events of 2022 took the industry by surprise, but brands that have adapted their strategies should have performed well in Q4.

Despite continued tremors in the wider economy this year, ecommerce is likely to continue to grow as consumer behaviour shifts online – and strong results from last quarter are a good sign of this trend.?

With a new year comes new marketing budgets. Your brand should be looking for efficiency instead of wholesale cuts, especially in channels where you reach new customers.

One area where improved investment delivers much higher ROI is creative. If your creative is not working for you, then your brand could be wasting a huge percentage of your paid social budget.

We expect to see an increased investment in social branding. It is much cheaper to reach your target audience with video on paid social compared to TV and directly feeds back into retargeting.

There are now clearer signs of what works – and what doesn’t – compared to when the slowdown first hit ecommerce. Success in Q4 is a good signifier that your strategy is working, so don’t lose focus this year.

In?the Readout – our quarterly review of the paid social landscape for ecommerce brands, we outline the key trends that advertisers encountered in Q4 and explore opportunities for brands as we enter the new year.

Key trends in Q4

Meta is driving more efficient results than in 2021

In the weeks prior to peak, after being higher YoY for most of 2022, CPM dropped beneath levels seen in 2021, and has stayed lower since. While CPM did increase week-on-week during Black Friday, it was to less extreme heights than in 2021.?

This decline is likely due to a combination of lower competition due to brands pulling back from the auction, strategies shifting to top-of-funnel, the proliferation of Advantage+ shopping campaigns driving a broader spread of demand, and Meta adding new inventory for Reels.

Meanwhile, conversion rates started to increase dramatically around the same time period?that CPM fell, and again, has remained high since. On Black Friday itself, we saw a 47% higher CVR YoY, driving 44% lower CPA and 71% increased ROAS.

Brands are targeting higher up the funnel

Investment in upper funnel objectives on Meta such as brand awareness or traffic increased by 298% QoQ and 179% YoY in Q4.?

This growth been fueled by a combination of brands looking to drive more efficient spend and changing marketing strategies since iOS 14.?

With 56% lower CPM when compared to conversions ads, these strategies are a powerful way to get your brand in front of your potential future best customers in a more competitive landscape.

Explore the latest paid social trends, learnings and opportunities for ecommerce brands in the full report: