Performance marketing in the e-commerce sector has experienced rapid change over the past two years, brought about by the boom in online sales, increased competition in the market and iOS14 and 15 updates.

One of the most significant ramifications of this has been the increased cost of advertising through cost per click channels such as Meta, Google and Pinterest. While the emergence of new advertising platforms such as TikTok has provided some relief, these emerging channels have not yet proven reliable for conversions, especially for smaller businesses with limited budgets.

To combat this rising cost of advertising, we are seeing the likes of Meta and Pinterest becoming increasingly influential as prospecting channels, while channels such as Google Ads capture a higher rate of last click conversion customers. A strategy that incorporates all these elements is crucial to drive efficient performance and a strong ROAS for your business.

When you increase paid social spend on a diverse range of top of funnel objectives, including Traffic, Landing Page Views, Video Views and Lead Generation, you may not automatically see paid social revenue or ROAS increase. Consequently, this can be a significant deterrent for some businesses where revenue and cash flow are at the top of the list of priorities.

An increased volume of brand term searches on Google is a key indicator that your top of funnel brand campaigns are performing well. As you grow your top of funnel paid social spend, you generate more brand awareness, which translates into more people searching for your brand name. At this stage, you need a strong Google Ads strategy to capture all of these new brand searches, as they ultimately have a high intent to purchase. These channels all work together to drive increased traffic and ensure this traffic converts at an optimal rate.

There is no set formula for how to split your budget between awareness or top of funnel activity, as it varies depending on the size of your business, revenue targets and other marketing activity. That’s why the Thoughtful Agency works closely with our clients to make informed recommendations on the best split of spend to grow revenue for your business.