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The holiday hangover is complete and Blue Monday has come and gone - it’s time to get down to business in the fresh and new 2024. As a brand owner (or marketer), you’re likely intimately aware of how much of a learning experience 2023 was. But what do we do with lessons? We learn from them, and make the next attempt even better.
Our Head of Consulting, John Coyle, shared five predictions for 2024 based on what we learned in 2023. Give it a read, and let us know if you’re ready for where these trends are heading!
Facebook has over three billion monthly active users, which makes it the most popular social media network in the world (and it’s not even close). 96% of social media marketers polled (in 2022) consider Facebook advertising to be the most efficient solution compared to other social media networks. In the past, it has produced the best return on investment, which is essential to marketing success on the platform.
As other networks grapple for a piece of the marketing pie, Meta will need to ensure marketers remain confident in Facebook and Instagram’s ability to drive sales. Besides the potential for return on investment for ads, Facebook and Instagram remain a great spot to spread awareness about your brand or its products without spending a dime. With algorithms that keep iterating and improving, it’s easier than ever to get your product in front of your ideal customers with the knowledge that Meta has.
Meta has adjusted the algorithms again for 2024, with AI becoming a larger part of how Facebook and Instagram personalize the content it serves to users, based on analysis of their behavior and preferences while on the platform. The algorithm values what users value, so if you’ve got your target market dialed in, you should be able to take advantage of it.
Over BFCM in 2023, over 71% of ad spend for over 11,000 brands in our retrospective data dive was allocated to Meta. We predict that Meta will continue to be a steady place to advertise in 2024.
As Google continues to evolve its ad platform, there will be growing pains associated with adapting to those changes. For example, Google has incorporated AI into the ads interface, including the ability to generate images and use AI-powered insights. When you think about all of the creepy images that AI can generate with a prompt that’s slightly off, just imagine how things might go off the rails if you don’t get your prompts just right. The learning curve will be steep, and we predict it will result in lower ROAS.
While Google has been a relatively steady platform since 2021, Meta is becoming even more steady with the Advantage+ campaigns. Google has an ongoing problem of being limited by demand, with its demand gen channels (display and YouTube) being hard to crack compared to Meta. It’s likely a lot of the dollars Google previously won by being reliable will head over to Meta instead in 2024.
Another major change for Google Ads in 2024 is the deprecation of third-party cookies expected by Q3. Less third-party cookies means that advertisers will need to collect first-party data to accurately target their customers (good thing we can help with that).
Google Ads also just keep getting more expensive. The average cost-per-click (CPC) for Google Ads across industries in 2023 was $4.22. In 2022, the average CPC for display ads was $2.32. Another victim of inflation, or is Google squeezing all they can out of advertisers while failing to deliver as lucrative of a return?
In our BFCM 2023 retrospective, we noticed a 12.7% drop in ad spend year-over-year on Google Ads, showing that brands are losing confidence in Google as a spot to advertise during the biggest sales period of the year. It’s possible that lower return on investment is driving brands to think outside of the box and try the fresh and new options to drive sales (like TikTok ⬇️).
The introduction and promotion of TikTok Shop means this platform is ready to give Meta a run for its money. As a creator-focused platform, it’s built for businesses who can jump on trends and viral moments quickly to make an impact and get eyeballs on their brand. TikTok has ambitious plans of its own, with a goal to grow TikTok Shop in the US to $17.5 billion in 2024.
The app itself is built for creators first, and advertising has been integrated as an added bonus. With the right content, it’s easy to go viral - and with over 150 million monthly users in the USA, there’s a huge opportunity to reach customers.
We predict that creators that tag products will make good coin, and brands that have invested in TikTok Shop will benefit. Another huge opportunity exists with TikTok Live Shopping Ads, which help people discover and watch live videos on the platform. Livestream shopping is a huge part of the industry in China, and while it hasn’t yet taken off in the Western world, there’s definitely potential. We all know trends start in the East first.
Inflation definitely had an impact in 2023, and this trend will continue in 2024. With tighter grips on purse strings, consumers are spending more time thinking about what they plan to buy as well as when they plan to make that purchase. Brands will need to lean into the natural seasonal trends, as well as plan ahead for promotions to make the most of them.
In the case of customers waiting for sales, brands need to understand that this is still an opportunity to advertise to those customers ahead of time. It’s important, as well, that brands ensure their markup on cost of goods is enough to still make a profit during promotions (hot tip).
An interesting counter-narrative to TikTok being fantastic in 2024 is that once it becomes more and more focused on shopping, the quality of the user experience will fall off. Remember Instagram when it was just a photo-sharing app? It existed for a different purpose than it does now (to make Meta money). While the ability to shop within the platform makes it great for brands, it might eventually cause a decrease in user growth and engagement.
Remember 2020? Of course you do. Well, ecommerce brands did well because we weren’t shopping in person. It set up an expectation that the pandemic would accelerate the adoption of ecommerce like we moved 10 years into the future.
Unfortunately (or fortunately, depending on how you feel), that didn’t happen. People still like visiting physical stores, so the very high amount of ecommerce spending didn’t follow suit in 2021. Then, 2022 was still a shaky post-pandemic hangover. The year 2023 was poised for actually getting us back to normal life, but cautious spending and the economy tanking really had us in a glass half-empty kind of mentality.
But hey, it’s a new year - and 2024 represents the first year where we can make reasonable growth projections. Any brand that survived the apocalypse that was 2021 will, by default, enjoy one of the best years since the pandemic.
One good thing that came out of the changes to ecommerce in 2020 was the blend of physical and digital channels (let’s get phygital). There’s truly no going back to pre-pandemic ways. Many physical stores still have a buy online, pick up in store option (how did we live before this?). If brands expect to be part of the phygital way of the world, they need to ensure they’re participating or they’ll get left behind.
It’s also expected that brands will leverage AI to create a more robust ecommerce presence. Whether it’s with an AI-powered chatbot, content creation, or marketing optimization, AI is her to stay. And as models continue to learn, they’ll only get better and better.
With better tools and a slightly better economic outlook, we’re looking forward to 2024!
In conclusion, as we dive into 2024, it's evident that the landscape of ecommerce trends is evolving rapidly. Facebook and Instagram are positioned as stable and profitable platforms for advertising, with Meta's algorithms and AI-driven personalization offering valuable opportunities for marketers. On the other hand, Google Ads’s former status as the steady platform is readily being overtaken by other platforms looking to shake things up. As brands seek to maximize their sales potential, exploring alternative options like TikTok may prove to be a wise move. Ultimately, staying informed and adaptable will be the key to making 2024 your best ecommerce sales year yet.
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