Hawke AI Insights – October 2023

Every year, it seems we continue to somehow break records on revenue generated during BFCM, but indicators are showing this trend is facing headwinds, or at least generating that revenue in a cost-effective manner. Even lead-gen businesses are seeing increasing ‘cost-per’ metrics that are making it more expensive to find customers in the digital environment. Needing to invest in non-paid tactics that impact the whole ecosystem, such as website improvements, SEO, and organic content will be key to efficiently creating the lift needed to achieve growth in this tough environment. Lifecycle of course always plays a role, but there is only so much you can expect from your existing customers. 

Takeaways for eCommerce Brands

• Since the sunsetting of UA (RIP), GA4 has been reporting steady transaction rates ranging between 1.7-1.9% over the last three months. This narrow amount of variance at least gives some confidence in the reporting coming from GA4, and a nice benchmark to lean on in setting expectations for the rest of the year. 
• Last year there was a dip in transaction rates from August-October, and then an increase in November and December, which would (hopefully) indicate a transaction rate of 2% or a bit better can be expected. 
• Media spend has not yet hit its seasonal ramp-up, with media spend only changing by 1% from August to September. October is only trending to be 3% higher than September. Are brands holding back even more of their budgets for peak retail, or are we seeing a more restrained media spend than in previous years? Spend YoY is down by over 10%, so there is some indication that budgets may not be as big in Q4.
• There was a 22% increase in CPA on Meta Ads and a 28% increase in Google Ads respectively. Spend stayed the same and conversions were down in September. There will need to be an adjustment with cost-conscious shoppers to the CPA expectations of brands, knowing shoppers will be likely bargain hunting.

Takeaways for Lead-Generation Brands 

• Goal completions reported in GA4 have also settled into a reasonable range between 9-10% for each of the months GA4 has been mandated. It is noted that this remains considerably higher than UA benchmarks, so with the re-defining of conversion events, there seems to have been a re-defining of goals across the board. 
• Lead generation businesses have not seen the same tightening as eCommerce brands, as lead generation spending was up 10% MoM and is up YoY on Google, Meta, and TikTok. This increase in spending has not directly led to increased goal completions though, as CPMs on Meta are up 19% MoM and Google Ads was up 33%. 
• Conversion rates on those platforms were less than 1% different from last month as well, so steady conversion rates but higher spend and CPMs ultimately means more expensive conversions.

This proprietary data comes from HawkeAI, a revolutionary data benchmarking tool that tracks your paid and organic marketing performance against competitors in your industry, provides real-time insights and suggestions to optimize ads, and presents data in an easy-to-read and even easier-to-report dashboard.