E-Commerce Trends August 2022

Each month we bring you e-commerce trends, analysis, and resources so you can pilot your business to success. Check out our July edition here to stay up to date.

This month we are taking a look at two poor converting online advertising platforms.

Advertising Effectiveness Declines

2020 and 2021 were probably the most successful periods in history for online advertisements. Basically, you were guaranteed solid conversions if you put up any ad at all. The success of online advertisements during this period was primarily a result of people spending more time online due to work from home, COVID lockdowns, and the stimulus payments received by most Americans.

In 2020 and 2021, sales were going up faster than marketing spend by a huge margin, so there was no need to analyze the marketing budget. However, as revenues decline, it is time to analyze where your ad spend is converting and where it is not.

Meta (Facebook)

Since Apple introduced a feature that allows you to disable ad tracking within the apps you use, Meta’s ad conversions have declined. So now, Meta is forced to spend a ton of money finding new data sources that are as effective as their IOS ad tracking was.

Our Outlook

We really only see two options here:

  1. Spend more time and money creating convincing copy that actually sells
  2. Stop advertising on Meta altogether if you do not have the budget to develop more effective ads

Snapchat

Snapchat is a poor performer when it comes to conversions. The conversion rate for Snapchat ads is a dismal 0.6%. The click-through nature of Snapchat and the relative youth of its users has not led to good conversion rates for advertisers.

Our Outlook

Move to TikTok. TikTok continues to be the fastest growing and best converting social media platform in existence. Focus your marketing efforts on TikTok, and you will surely receive a good return on investment.

Conclusion

When revenue declines, focus on placing advertisements on high converting and growing platforms. Currently, that does not include Facebook, Instagram, or Snapchat.

At Windstone Financial, we have experience helping e-commerce brand owners grow the business of their dreams. If you need help reaching your business goals, click the button below to speak with a CPA today!

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Windstone Financial

Windstone Financial

We are a dedicated team of CPAs that work exclusively with small business owners to lower their taxes and grow their businesses. We will provide relief to all of your accounting headaches.

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