Austin Gilliland
In the paid social space, 2024 was a year of realigning expectations. Overall performance still met the necessary targets, but data revealed a major shift in purchasing behavior. Across verticals, Kargo Commerce noticed several key trends in 2024 that influenced consumer behavior, and these trends will continue to prove influential throughout 2025.
So, what did we learn?
1. Advertisers are more focused on new customer growth vs last-click performance
Ad delivery efficiency was up in 2024 with CPMs down YoY due to an increase in investment and more willingness from clients to fill the funnel with upper funnel and mid-funnel tactics.
- CPMs were down in 2024 by 6% from 2023.
2. Purchasing remained constant throughout the year with peak sale days drawing less interest compared to previous years
Throughout the first three quarters of 2024, consumers were converting less during sale periods. They were shopping less frequently but buying more at one time, demonstrating a more calculated approach to purchasing. In Q4, purchasing behavior indicated the traditional CVR spikes during sales periods.
- CVR remained stable MoM, but CVR spikes during sale periods outside of Q4 were down 56% YoY. AOV during those periods was up 4% YoY.
3. Consumers were less concerned with getting the best deal and settled for good pricing during the holidays
Recent online consumer sentiment has shown that the rise in sale frequency and lack of significant discounts made purchasing throughout the entire holiday period less compelling.
- Data shows that consumers made smaller purchases during Cyber Week. Advertisers that utilized "free shipping" messaging did better with these smaller orders because consumers were more likely to execute smaller purchases when they received free shipping vs. opportunities that maintained shipping fees in all but high quantity orders.
- During Cyber Week, AOV decreased by 4%, but CVR increased by 11%
4. Younger consumers are more likely to convert after seeing video-content
Data shows that Millennial and Gen Z consumers prefer to purchase through video content vs static ads. This behavior is fueled by innovations like Product-Level Video.
- Overall, PLV has 35% of conversions occurring on day one compared to only 23% for non-PLV assets.
5. Non-Meta platforms have started to show long term viability for multiple sources of truth
Investment in platforms outside of Meta have proved fruitful to advertisers who have reallocated media spend based on LC and MMM performance.
- One advertiser saw their LC Adobe ROAS jump by over 250% after consistently investing in Pinterest over the course of several months.
- Another advertiser noticed a 70% ROI jump YoY in their MMM model with consistent investment in Pinterest.
Based on insights from 2024, brands looking to remain competitive must adapt to changing consumer behavior and be prepared to utilize video content and automation and diversify advertising platforms. Embracing these changes will be essential for navigating the market effectively in 2025 and beyond.
