By Will Ashton, Founder at Nest Commerce
Meta is now cheaper than in 2021. After being higher for most of 2022, Cost per Thousand (CPM) dropped beneath levels seen in 2021 – and has remained lower since. These were some of the key findings of the latest Nest Index report, based on global Meta and TikTok data from 40+ ecommerce brands, 78% prospecting campaigns, generating a total of 1.2 billion impressions across Q4.
Produced by paid social performance and creative agency Nest Commerce, the report reveals that a combination of lower competition due to brands pulling back from Meta’s auction, strategies shifting to top-of-funnel, the proliferation of Advantage+ shopping campaigns driving a broader spread of demand, and Meta adding new inventory for Reels, is driving more efficient results from the platform.
Conversion rates have recovered since iOS 14
Conversion rates started to increase dramatically around the same time period that CPM fell, and again, has remained high since. On Black Friday itself, we saw a 47% higher CVR YoY, driving 44% lower Cost per Acquisition and 71% increased ROAS.
We expect that this is due to improvements in statistical modelling and data signals driving improved performance and reporting. An additional cause may be changing consumer behaviour as more shop online due to the rising cost of living.
Short-form video is now a mainstay on Meta
Spend on Reels increased by 18% QoQ, and a massive 4000% YoY, as the trend towards short-form video accelerated in Q4.
Although CPM has jumped 115% YoY on Reels, the format remains 39% cheaper compared to non-Reels, with similar CPMs to TikTok.
Brands are targeting higher up the funnel
Investment in upper funnel objectives on Meta such as brand awareness or traffic increased by 298% between Q3 and Q4. This growth been fueled by a combination of brands looking to drive more efficient spend and changing marketing strategies since iOS 14.
With 56% lower CPM when compared to conversions ads, these strategies are a powerful way to get your brand in front of your potential future best customers in a more competitive landscape.
TikTok provides more cost-effective reach
The key selling point for TikTok is low cost, high reach – but how did that look in the most expensive period of the year, Black Friday to New Year?
Across UK traffic activity, TikTok CPM was at either half or less than half of Meta CPM. As 2022 came to a close this cemented TikTok’s status as the channel for brand investment, allowing us to reach the highest number of people with 53% cheaper CPM during the period.
About the Readout and Nest Index
The Readout report is a Quarterly trends and learnings report derived from the Nest Index. The Nest Index is a paid social index that draws on aggregated data from Nest’s portfolio of ecommerce clients. It’s used by our teams daily to benchmark brand’s performance and uncover what’s working, what’s not, what you should do differently and where you need to be bolder. It uses global data from more than 40+ ecommerce brands, 78% prospecting campaigns, generating a total of 1.2 billion impressions across Q4.