Performance marketing shifts to social-first as search is less efficient - report

By

Nigel TAYLOR

Published
Jul 17, 2024

Successful performance marketing strategies are shifting to become social-first as Search becomes less efficient amid soaring cost-per-click. That’s the finding of Nest Commerce’s latest Readout report.

Against a backdrop of rising consumer confidence, the report reveals there has been a 57% year-on-year increase in average ad spend on Meta platforms, 5% up from peak season, Q4 2023. 

Overall Meta cost-per1,000-impressions (CPMs) are rising by 6% year-on-year, “due to increased competition within the platform with advertiser activity hotting up in response to a more positive outlook”.

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Nest Commerce's research, based on global ad data from 40+ e-commerce brands, managing over £100 million of media spend annually,  spotlights a strategic shift in channel mix towards paid social to drive growth across all stages of the customer journey. 

“The growing use of upper-funnel marketing strategies on social platforms is evidenced by a significant 4.2x year-over-year increase in awareness campaigns on Meta”, it said.

This shift is driven by factors such as rising customer acquisition costs and a decline in brand search visibility, making it crucial for brands to target new audiences and build brand preference on paid social. 

Brands just focusing on bottom of the funnel are predicted to fall further behind in this new landscape, it warned.

While Search remains an important channel, the report finds that it's becoming more expensive. Cost-per-click has risen by 49% year-on-year, putting pressure on lower-funnel strategies reliant on this platform. However, the report suggests that investing in full funnel performance across Meta combined with search can help mitigate these rising costs.

Nest Commerce's research also highlights the growing potential of TikTok for driving sales. Conversion objective ad CVR on TikTok has seen a significant 51% increase for two consecutive quarters, suggesting a promising avenue for brands looking to leverage this platform for e-commerce success.