E-commerce businesses saw fierce competition for another quarter, with cost per thousand impressions (CPM) and cost per click (CPC) growing globally over the quarter and the year in Q2 2022, according to the latest figures looking at Meta ad trends.
The findings from e-commerce creative and social media agency Nest reveal a 27% global increase in CPM over Q2 2022 compared to Q2 2021, and a 22% uptick in CPC.
More immediate trends showed a smaller uplift in CPM for the UK and US (3% each) compared to the rest of the world, where CPM was up 24% last quarter compared to Q1 of this year.
But click through rates (CTR) across the US fell dramatically, by 17% over the quarter (29% year-on-year) compared to a 6% rise in the rest of the world and a 2% growth in the UK.
The findings indicate that more brands are advertising internationally, said Nest, and that the rest of the world is experiencing the most cost-efficient where traffic is concerned.
Year-on-year, the US saw a significant hike in CPC, at 46%, against a 29% drop in CTR and a more muted 3% uplift on CPM. The UK, by comparison, had an 8% rise in CPC in Q2 2022 compared to 2021, with CTR and CPM up 12% and 21% over the year respectively.
Sustainability drives conversion
Sale-based messaging delivered the best return on ad spend (ROAS) over the quarter, which Nest predicts will continue as economic pressures tighten purse strings.
Messaging based around quality was behind sale-based propositioning, and led to a high average order value, but ‘sustainability’ messaging, despite lower CTR and ROAS, drove the highest conversion rates – at 62% higher than the average found across the research. The report said this indicated that messaging centred around sustainability encouraged eco-conscious consumers to buy.
Short-form video spend accelerates
With a surge in TikTok and the investment from Meta into Reels to compete, Nest found that spend in Stories had shot up by 182% in Q2 year-on-year, while CPM was up 102%.
“There is a shift towards Reels as a result. Success on short-form video and UGC content will be key to achieving performance on paid social as this trend accelerates,” Nest said.
Broad audiences were driving lower cost traffic than interest (29% lower) or lookalike targeting (48% lower), with Nest noting that ad creative was “especially important” in ads for broad audiences.
Indeed, creative was the most significant optimisation lever for performance on paid social last quarter - with static ads delivering a 34% higher CTR and 39% higher conversion rate than video ads, “highlighting the efficiency of static creative to drive performance despite current trends toward short-form video,” Nest said.
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