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Covid-19: Is E-commerce in danger?
Let’s not beat around the bush. COVID-19, particularly isolation and social distancing, has a major impact on the global economy and raises questions when it comes to your e-commerce activities.
At J7 Media, some of our clients have put their campaign management on hold, but hardly any e-commerce business has done so. We took this opportunity to take stock of global ad delivery costs (acquisition & retargeting) in this industry by comparing the period from February 1 to 22 with that from March 1 to 22.
A few things regarding this table:
- Compared to February, we doubled our Impressions during the March period
- Only two clients saw their overall CPM increase by 15 to 20%
- 4 clients saw their cost per thousand people reached increase by 7 to 35%
Overall, we are seeing a decrease in ad delivery costs over the month of March. One assumption is, undoubtedly, the economic consequences of isolation and social distancing on businesses. Facebook now has fewer advertisers, therefore ad spend is cheaper.
As you may have noticed, we did not anonymize Coco Village and Coco Village US’ data because this client, in spite of the current situation, has just achieved a commercial feat worthy of Black Friday.
SETTING THE STAGE FOR A NEW BLACK FRIDAY.
Long before the announcement of confinement and the omnipresence of COVID-19 in the media, Coco Village had one goal: successfully launch its new Balance Bikes collection.
In order to achieve this goal, we used the same technique as for their Black Friday, namely the VIP List.
It consists of offering early access to a promotional offer or a collection before it is available to anyone else. This requires a number of elements:
- An aggressive offer
- A landing page / thank you page
- An email marketing platform that can collect and process leads
- An email sequence
- Conversion campaigns with Lead or Leadform objectives on Facebook
From February 28th to March 22nd, we collected more than 10,000 leads across Canada.
Here are the ads that we set up for the acquisition phase.
As you can see, we used a lot of UGC (User Generated Content), in other words, content generated by Coco Village users/customers. But we also used more traditional advertising.
After about a month of intense lead generation, we had thousands of people in our warm audiences for Canada.
Here, "Visiteurs Velo" means the people who visited URLs containing the word vélo/bike, while "Visiteur Funnel Velo" are visitors to our opt-in page (not the e-commerce site).
We, of course, had a dedicated funnel to manage all this traffic!
As soon as they signed up to our VIP List, the leads were invited to visit the website so that they could see which bike might appeal to them.
LAUNCH AND RESULTS
On March 23rd, we launched our sales campaign on the warm audience of potential buyers that visited the funnel and thus became leads. Here are the ads that were used.
Here are the results for the day of March 23rd, with Facebook only.
Then March 24th.
Finally, here are the results for Canada that Facebook is taking credit for.
Therefore, we attributed, via Facebook, $206,446 in sales for $61,276 spent. We have a ROAS of 3.37 at the moment and it is likely to increase in the coming days.
As you know, the Facebook Pixel has a conversion window of up to 28 days. This means that we have to wait 28 days following the last campaign to review the final performance.
Of course, we've had a lot more e-commerce sales thanks to our email sequences, but they're not necessarily attributed to Facebook.
But then, why call it a new Black Friday?
If we look at the results of our 2019 Black Friday in Canada, here is what Facebook attributes to us.
To be clear, we had launched our Black Friday two days in advance for our VIP lists and then extended the promotion until Cyber Monday (Monday, December 2).
There were more than $261,000 in sales for more than $53,500 spent, with a ROAS of 4.88 over that period. We're not far from our March results ($206,446 in sales for $61,276 spent, ROAS of 3.37), which is impressive in view of the current context.
WHAT CAN YOU TAKE AWAY FROM THIS CASE STUDY FOR YOUR E-COMMERCE BUSINESS?
As you can see, overall, competition has decreased on Facebook.
As Protocol explains, much of the company's advertising revenue comes from “at-risk” industries such as Tourism/Travel. Conversely, due to confinement, social media usage has “exploded”, says Facebook.
So more traffic, but less advertising.
There is every reason to believe that there is more room and that e-commerce businesses are amongst the few that can take full advantage of it. This may be temporary, so act quickly.
Coco Village has demonstrated without a shadow of a doubt that, despite the situation, we could continue to advertise on Facebook and sell on the Internet. In fact, some of their customers directly commented on the current circumstances.
Last week, we had an in-depth meeting with our dedicated representative at Facebook and were able to obtain 2 documents that may be of interest to you:
In the short term, Facebook advises us to maintain a certain level of communication with our clients and to then tailor and adapt our messaging to each individual situation.
You might be tempted to stop or significantly reduce your ad spend during this time, but you should be doing the exact opposite.
Attention is focused on the Internet and you stand to gain by maintaining communication that is appropriate to the current circumstances.