The Summary
As we step into a long holiday weekend, we look back at the week prior which proved weak across most metrics.
We continue to see sliding performance across most industries as we step into yet another off-peak week. CPMs increased across Meta (+2.40%) Google (+5.80%) and TikTok (+3.79%) as advertisers scramble to close out the quarter. This improved CTRs across those channels at the cost of CPC.
The green arrows for CACs are misleading: the drops are minimal at best, with Meta down only -0.16% and TikTok down -0.06%. It continues to be a bear season for DTC brands and we have yet to see a string of consistent upward performance this quarter. The negative trend in conversion performance appears to have inspired an increase of spend on bottom of funnel Google Shopping ads (+17.46%).
Every industry is feeling the effects, with red arrows across every single vertical except Food & Drink. It is picnic season after all. Q4 is going to be crucial for DTC brands looking to hit annual targets.
The Takeaway:
Yet another tough week for DTC performance in this tough year. It's the holiday weekend, so expect DTC sales to drop even further unless you have some contextually perfect product.
We're mostly happy to see a few metrics "bottom out." CACs had been increasing for weeks and remain a challenging metric, but at least it isn't falling any further. Same for CTR, which rebounded this week but didn't necessarily translate into conversions. Which gives us an idea...
What effect does the typical "two week payday" have on your business? The week we're reporting on here falls on a "not paid" week for most consumers. Do people buy your stuff more after they've just been paid?
It's interesting to see conversion rate drop while CTR increases. Typically this suggests window-shopping behavior, but to happen on such a wide scale makes us wonder if this is a fluke or something to dive into. We'll keep an eye on this for weeks to come.
As promised, here's five reasons your conversion rate is dropping:
1. You're tracking conversion rate when you should be tracking new visits and revenue per visit. Conversion rate DOES NOT tell you how well your page sells. CVR is just a mathematical equation. If you optimize for conversion rate exclusively, you end up driving yourself into a corner strategically, leveraging coupons, on-page "hacks" and other tactics, instead of focusing on systems that will actually drive sales before people even arrive on-page. Look upstream to improve CVR.
2. You are A/B testing minor tweaks instead of sweeping changes to your landing pages. I promise you that the font you picked for your product page is not affecting sales. Those sorts of minuscule A/B tests are popular for brands with billions of pageviews, which I'd guess is not you. Instead, focus your A/B tests on dramatically different pages, changing messaging, layout, product images, pricing. These big tests will show you very quickly what your baseline conversion behavior is.
3. Your landing page is too complicated. Your CRO agency is likely billing you by the hour, yes? That leads to constantly overcrowding pages with features, add-ons, all sorts of little gizmos and gadgets that fill up scope but don't necessarily smooth the path to conversion. Install a click and hover tracking tool like Hotjar and discover what the most common conversion behavior is and empower that. Less is more.
4. You're obsessing about conversion rate when it truly doesn't matter. Conversion rate is a RESULT, not a strategic or even directional indicator. If your page is not converting, you should be asking why, not immediately assuming you need to tweak your LPs or product pages. Expand your scope. Perhaps your LP isn't converting because your ads are attracting the wrong people, or because your pricing is entirely wrong. Look beyond the page.
5. People are buying less stuff and you're asking the wrong questions. Ideas: How much of this has to do with your own landing page? What's happening in your industry? Does the drop in conversion rate exist across all your products and ads? Is this a larger trend? What parts of your business ARE succeeding, and what's the conversion rate there? What IS working and how can I take those lessons to my own landing page?
Some helpful links and news we found:
👎 Do we collaborate too much? Understand the right way to work together and watch your productivity soar.
🎊 Nik Sharma celebrated his birthday by writing the 27 reasons your ecommerce website is a disappointment. Happy birthday Nik!
🏆 These are the 19 traits common across the top 1% of businesses. Here's what you should really be focusing on.
🚚 UPS is facing the biggest strike this country has seen in 60 years. The Teamsters are standing firm for better driver pay: make a plan with your 3PL to survive disrupted logistics for your deliveries.
👁️🗨️ The Visions Volume IV report has arrived. You keep asking where we're staying up on the cutting-edge trends in ecomm: this is it.
🏚️ Your GA4 is probably set up wrong - check this list and fix your setup. Reject tradition, embrace modernity!
🚀 Look at these winning Facebook Ads with Dara. Just a quick check in on what's working with one of our favorite media buyers!
🔎 Master Creative Analytics and run faster creative tests with tangible results. A Northbeam special for you.
Some job openings we like:
🚨🚨🚨 Power Digital has so many roles open. This listing stays here because there's so many jobs across all departments in here.
Senior Manager, Paid Social - Block & Tam: a role at a boutique NYC agency.
Growth Marketing Manager - Gainful: help this performance nutrition company grow.
Marketing Manager - Loftie: a fantastic role to break into the wellness vertical.
Head of Growth - MuteSix: help this great agency win and retain new biz.
Looking forward:
Our new MMM Plus product is still open for early access. Get on the cutting edge of media mix modeling before everybody else figures it out. Sign up at the link.
Join us on Monday's webinar while we chat profitable growth with Krish Himmatramka of Do Amore. Krish grew his business to $40m in lifetime sales without taking a dime of external funding. See you there!
