“When uncertainty rules there are two winners: convenience and value,” said Andy Childs, a Facebook connection planner, during a recent Facebook Insights Live webinar. “The brands who do best in these win, and those who don’t lose.”
And as politics, economics, financial and health uncertainties combine in Q4, this is only going to get amplified. It’s already changing how we shop, which means it’s changing how brands advertise.
This was at the heart of August’s Facebook Insights Live webinar. The webinars are short sessions that take place towards the end of each month to provide clear and actionable insights to help brands and businesses adjust in these changing times.
So what’s happened and what do you need to focus on in Q4?
A decade of digital growth in a few months
“Covid-19 has been the great digital accelerator,” said Childs. In fact we’ve seen the equivalent of a decade of digital growth in a few months. It took ten years, from 2010 to January 2020, for digital sales to increase by 13%. But it only took five months, January to May 2020, for them to increase by a further 13%. Normal looks very different.
From going shopping to going buying
Purchasing patterns are changing: people browse less in-store, and when they do visit, it’s to buy. Consumers are rightly wary of crowded environments, but despite making fewer store visits, the size of basket purchases is up. “People are shopping with purpose, changing the role of the store in the purchase journey. This change has created a ‘discovery gap’,” said Facebook connection planner, Pete Buckley.
In-store has always been the biggest discovery channel for brands and products, now people are spending significantly less time there, it’s leaving a gap.
The next step is for brands to move from e-commerce to discovery-commerce. This means shifting focus from conversion and using digital as a discovery tool as well. Facebook’s tools such as Dynamic Ads for Brand Awareness (DABA) help with this. When it comes to gift shopping for instance, people are active in new and wider sectors – think young men buying face cream for grandmothers. A broader, dynamic brand approach can work around this consumer activity.
From millennials to the masses
“When we look at the growth of e-commerce and mobile, it’s actually Gen X and Boomers who are driving that growth,” said Childs.
Again it’s Covid that has accelerated this. It has changed the relationship for over-40s with online shopping. According to figures from Ipsos, 83% of Gen X and Boomers have bought a product online in the last month.
Over-40s have adopted mobile faster than any other consumer group during the pandemic. This poses a challenge for discoverability for new products in e-commerce and mobile, but also a major change in purchase method.
As a result, brands need to make online shopping as seamless as possible. This means shoppable formats, making it easy for people to buy at every step.
The digital buying journey still needs work
Unfortunately, according to Facebook’s insights most over-40s are still experiencing issues when shopping on mobile, with 70% saying there is friction due to slow loading times and poorly optimised sites.
More generally, this isn’t just a problem for over-40s, billions are lost due to friction in the shopping journey – and no brand can afford to waste money in 2020.
For brands there is a big opportunity. Focus on how convenient their products are to buy and how to make shopping easier at every step. Make products easy to pick up, make it easy to buy with shoppable formats and make any on-site experience seamless.
From discount to inspiration
“Most people across Europe have already taken actions to reduce their spending. This festive season discounting will be more aggressive than ever,” said Buckley. Add in that people want greater certainty, with earlier actions… media advertising has to follow suit.
Here are three steps you can take, from a Facebook perspective, that will help increase your return on ad spending.
1. Exit the learning phase (for machine learning) before peak shopping. The ad delivery system takes 50 conversions to optimise effectively and so any edits to your campaign will take you back to the beginning of the learning phase which means it won’t be optimising as effectively.
2. Automation drives results, so focus on automatic placements and dynamic ads to make the machine work harder for you.
3. Q5! Facebook call the period between Boxing Day and January Q5. Ad spend is down across the board but conversion rates remain the same. This means a greater return on ad spend, much improved CPM. It’s a genuine, much missed opportunity. But shush, don’t tell everyone.
Facebook Insights Live webinars take place on the last Wednesday of every month and provide clear and actionable insights to help brands and businesses adjust to the new normal.
Upcoming episodes include: