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January 22, 2024 - By Barron Rosborough

Hawke AI Insights – January 2024

Navigating Seasonal Dynamics: A Comprehensive Insight for eCommerce and Lead Gen Brands

Authored in collaboration with 6Pages

The Resilient Landscape of eCommerce in a Post-BFCM World

December 2023 unfolded as a testament to the evolving resilience and strategic adaptability of eCommerce brands. In the aftermath of Black Friday/Cyber Monday (BFCM), a period typically marked by declining sales, the impact was less severe than anticipated as a record 200.4 million consumers shopped through those five days, an increase of nearly 4 million consumers, according to the National Retail Federation. A notable observation was the transaction rate in Google Analytics 4 (GA4), which experienced only a minor decline of 0.5% from November, compared to the 0.7% drop in the previous year. This suggests an effective engagement with customers and an enhanced understanding of consumer behavior during the holiday season.

Decoding the Subtleties of Consumer Engagement

Consumer engagement in December 2023 showed interesting trends. The reduction in clicks from November to December was less pronounced. On Google Ads, the decrease was just 3%, against a 9% drop in 2022. Similarly, on Meta platforms, the decrease was 5% in 2023, compared to 11% in the previous year. These figures indicate sustained consumer interest, offering opportunities for targeted marketing strategies even post-BFCM.

Note: These results also coincide with an exodus of advertisers from the X platform and likely a shift in spend allocation to make up for that.

The Stability of Cost-Per-Click: A Strategic Win

A standout aspect in 2023’s eCommerce trend was the consistency in cost-per-click (CPC). Unlike 2022’s increasing CPC, the stable cost in 2023 suggests a balanced and effective ad spend, allowing brands to maintain visibility and engagement without escalating costs.

Lead Gen Brands: Contrasting Rhythms in a B2B Context

For lead generation (lead gen) brands, particularly in the B2B sector, December represents a contrasting rhythm. As consumer shopping peaks, business procurement decisions slow down. This was reflected in the 12% reduction in sessions from November to December 2023, following a similar trend from 2022, highlighting the importance of understanding seasonal business cycles in lead gen marketing.

Understanding the Nuances of Goal Completion Rates

Despite the decline in sessions, goal completion rates in GA4 remained stable throughout the fourth quarter. This indicates that the changes were more related to market and economic factors rather than a decline in operational or marketing efficiency.

Revisiting Paid Media Strategies: A Call for Optimized Allocation

The 7% increase in media spend on Google & Meta platforms for lead gen brands in December suggests a need for strategic reevaluation. This increase, despite lower volume, might indicate an overemphasis on end-of-year spending. A more balanced budget allocation throughout the year could yield more consistent and effective results.

Embracing Adaptive Strategies for Future Success

The final quarter of 2023 provided valuable lessons for eCommerce and lead gen brands. eCommerce showed adaptability in a challenging period, while lead gen brands faced unique seasonal fluctuations, emphasizing the need for nuanced budget allocation. These insights pave the way for more sophisticated, data-driven strategies, allowing brands to navigate the complex markets with greater agility and foresight.

Potential Headwinds

Potential Tailwinds

At A Glance:

Takeaways for eCommerce Brands

  • December’s results expectedly dropped relative to November’s results due to BFCM. The good news is that  the drops in 2023 were in line or better than in 2022, and the efficiency and quality of the ad spend was maintained. In other words, while seasonality had an impact this year, it was not as profound as last year. 
  • For example, December’s transaction rate (GA4) dropped by .5% compared to November’s rate. The good news is that this is not a cause for concern, as last year’s change was .7% over the same period. 
  • Clicks also saw less of a decline from November to December, indicating that some consumer intent was still left to be captured in December. 
  • For example, this year clicks on Google Ads dropped by just 3% December compared to November, while in 2022 that same period drop was 9%. 
  • On Meta it was the same story, this year drop of 5% and 2022 drop of 11%.  
  • Furthermore, we know this is not simply a budget allocation impact, as CPCs in 2022 got more expensive, and in 2023 they stayed consistent. 

Takeaways for Lead Gen Brands

  • Lead gen businesses, which includes a significant amount of B2B businesses, has the inverse seasonality of eCommerce brands. While individual consumers are in shopping season for November and December, businesses are not making new procurement decisions in this time period. 
  • Sessions for example declined by 12% in December compared to November, which is on top of a 4% decline in November over October. 
  • This is consistent with 2022 as well where the changes were 10% drop in December and 4% drop in November. 
  • With this sort of patterning, marketers at lead gen brands would be smart not to back-weight their sales projections or customer acquisition/sales lead volume. 
  • Goal completion rates (GA4) stayed very consistent all of Q4, varying by only .5%. In other words, this was simply a volume and economic impact to goal completions. 
  • From a paid media perspective, December media spend on Google & Meta actually increased by 7%. So, lead gen marketers would likely be better off re-allocating some of that budget throughout the year. Hopefully these increases were not in a last ditch attempt to hit revenue or lead targets, as the volume just wasn’t there.