What will CPCs look like in 4 years?

Predicting the future of e-commerce is always tricky; one certainty is that CPCs on Meta and Google will increase.

This rise will be driven by heightened competition, increased consumption, and shareholder pressure (the same pressures as five years ago). The difference now is that both companies have invested heavily in AI and will need to recoup these costs through advertising income.

From a marketing standpoint, it's tempting to focus on brand-building activities via Instagram. Meta ads are user-friendly, seemingly scalable, visually appealing, and provide instant feedback—spend more, gain more followers and engagement.

Meta has also successfully bridged the gap between marketing and branding departments, with both now heavily invested in Meta ads and their business value.

As an agency owner, I have a unique perspective on various brands' approaches. During the pandemic, many brands struggled due to increased competition and ad costs.

Many of these companies believed they had a strong brand to carry them through tough times. However, when they turned off their ads, their business essentially died—they'd built an Instagram brand, not a real brand.

We expected this to be a wake-up call for e-commerce brands, but as the pandemic recedes, it seems old habits are re-emerging.

Read our detailed post linked below for more insights on this topic, including data sets illustrating the trend of rising CPCs.

(The post includes our data showcasing what CPCs will look like across both platforms in 2027.)

Facebook ad costs are higher than ever:

And here’s Google for the record:

The problem with Paid Media

Paid media is the opposite of incremental growth, as this LinkedIn post illustrates:

Here’s another visual for you referenced by Jake N (interview linked below) from Les Binet:

Activity for you

We all know CPCs have been rising and will continue to rise, but can you honestly say you can afford the 2027 CPCs referenced above? Even if you could, your returns are diminished.

Here’s an exercise for you:

Take your existing traffic from paid media, assume the same AOV and conversion rate, but increase your media spend by 20-35% (based on the above data). What impact does that have on your returns?

Interview with eCom Marketing Leader

This month's interview is with Jake N from Sarah Raven. I used to work with Jake when we both worked at MADE.com. He then went on to be the CMO of Piglet in Bed, which became a NOVOS client. He’s now followed his obsession with gardening and works as the Marketing growth lead at Sarah Raven.

In this interview, Jake shares with you:

• Personal brand faves: Jake swears by the timeless quality of TOAST clothing and MUJI’s no-fuss essentials

• Skipping university: How skipping university helped accelerate his career in marketing

• Big spender: His most lavish eCommerce purchase

• Ai: Why AI is overhyped (for now)

• Mental health: Managing the relentless pressure of performance marketing in eCom

• What is the worst part of the job? Being a ‘referee between teams’

• Pain point for 2025: Rising cost of paid media (per the above section!)

• Balancing product and pizzazz: In a competitive landscape, loyalty comes down to one key element: creating a product experience that stands out.

• SEO: The love-hate channel: While paid social is Jake's favourite, SEO offers unmatched rewards despite its constant challenges.

Coming soon: Our New eCom Podcast

We’re launching a podcast created for marketing leaders working in eCommerce.

Jake (interviewed above) is my co-host, and each month, we’ll be bringing you:

• Focus Sessions: Monthly round-ups of trends in eCom marketing (so you don’t need to read any more blogs or doom scroll junk on LinkedIn)

• Growth Sessions: Interviews with marketing leaders working in eCommerce brands. If you want to be interviewed in 2025, reply to this email.

In the first session, we’ll focus on the Google Shopping 2.0 launch in the US and what it means for eCom brands. We'll also chat about ChatGPT search, Amazon One’s new AI content bot, and more.

Case Study: Positioning our client’s brand at the forefront of a trend

A big part of our PR offering is spotting trends and positioning our clients as the brand within that trend. Here’s this month’s example.

Our PR team identified ‘Apple Spice’ as a trending topic within interiors.

This is from the team: “In addition to our planned Digital PR roadmap, we consistently stay alert to any emerging reactive trends. With Starbucks releasing their 2024 autumn drinks menu, we saw Apple Crisp taking centre stage with a range of new drinks. Whilst Pumpkin Spice has dominated seasonal trends for years, even influencing interior decor, we saw an exciting opportunity to position Apple Crisp as the next big PR trend in interiors.”

We acquired multiple pieces of coverage for our interior client off the back of this trending content; highlights were:

1. https://www.goodhomesmagazine.com/inspiration/brown-interiors-trend/

2. https://www.thesun.co.uk/fabulous/30434737/apple-crisp-new-pumpkin-spice-how-autumn-look-home/

eCom Conversion Trends

Gifting conversion rates have spiked in recent months in the lead-up to Christmas. Home & Garden has been gradually declining, driven by outdoor and seasonality. Clothing has been erratic in recent weeks.

Black Friday Special

Black Friday is just around the corner and if last year is anything to go by, this is what you can expect to see revenue-wise day over day:

• The majority of orders are made on black Friday itself, as expected.

• Gifting sees the largest day-over-day rise, with orders increasing 67% compared to Thursday.

• Gifts also saw an interesting spike on the Tuesday before a drop and recovery.

• The least erratic category is home & garden.

• Saturday is the weakest day compared to total market trends.

• Interestingly, Cyber Monday doesn’t see any particular rise compared to the other days.

Want more data?

If you’d like this data broken down by your industry, price category, or a particular subsector, reply to this email, and we’ll see what we can do for you.

More Knowledge from the NOVOS team

• Why affiliate links are still good for your brand

• Four ways to use social trends in PR

• How to approach PR in the US market

• Why eCom brands need PR

• Do these things when your organic traffic is stagnating

• How to leverage PR for Black Friday