The ecommerce marketing quarterly
Introduction
2025 is here. Despite improved growth in the UK and US, this is expected to be a tumultuous year. What does that mean for brands? Growth is out there, but it isn’t being evenly distributed. Take a deep dive into the trends and opportunities for ecommerce brands in the January edition of The Readout.
Will Ashton CEO, Nest Commerce
Last year saw regime change on both sides of the Atlantic. Now, as we look ahead in 2025, we are seeing a stark mixture of optimism and fear amongst retailers.
The gap between brands doing very well, and those that are struggling, is not just visible – it’s visceral. Companies are feeling it in their bones.
Despite this, growth is rebounding in the UK. Meanwhile, the US market is accelerating.
Nest data shows that last Black Friday, brands running a full-funnel strategy saw a 41% increase in YoY spend. The same market, but two very different outcomes. The playbook for winning is clear:
Firstly, brands need to take a ‘funnel-first’ approach to paid media. Instead of making a predetermined channel section, map out the entire funnel, and identify the best mix of channels for each stage based on your target audience and objectives.
Secondly, use of automation for continual ad optimisation is an important differentiator. This will only become more significant as technology develops. Introducing our proprietary tech: Hummingbird.
Thirdly, a progressive international strategy is essential to derisk economic challenges at home, and set brands up to scale laterally.
Finally, mastering the intersection of creative and media, with a strong creative strategy and continuously rotating creative, is essential to make paid media work in 2025.
Want to stay on top of these trends? We are hosting ‘Winners 2025 – a Nest matinee’ on 13th March at Rich Mix Shoreditch.
Expect a packed schedule with growth strategies from the best in the business, including True Classic, AllSaints, Mint Velvet, TFG Brands, and many more.
Search reaps rewards of full-funnel strategy
For our clients that implemented a coordinated cross-channel, full-funnel ads strategy across both Google and Meta, we are seeing a dramatic increase in performance on both channels.
We have grown Search spend for these clients by 113%, while revenue has grown at a higher proportion as a result of full-funnel, with a x5.2 increase in revenue attributed to Search.
In particular, Search remains a valuable channel for demand capture.
How Damson Madder quadrupled sales
The right approach to paid media is rocket fuel for brands that already have a buzz. Our full-funnel, cross channel approach quadrupled YoY sales for high-growth D2C Damson Madder.
We started by ramping up Meta for a quick impact, and boosting Search to capture demand. Next, we layered Pinterest for midfunnel audiences, and TikTok at the BOF, alongside tailored creative for each funnel stage and channel.
The outcome was a x4 YoY increase in sales in 2024, alongside a x2.8 YoY increase in new customers.
YoY growth in sales in 2024
Meta spend by quarter
KEY TRENDS: CHANNEL MIX
Bid multipliers: target specific states with ASC
When targeting the US, going state by state is a winning approach.
Can you leverage ASC to achieve this? According to the results of this Nest test, bidding on key states in the US had a positive impact on campaign delivery, account ROAS and revenue.
Applying bid multipliers to key states resulted in improved campaign performance versus campaigns with no bid multiplier, with 17% higher ROAS. This was driven by a combination of higher CVR and AOV, showing the success of the wider strategy on performance results.
How to win in the US
In our virtual panel, ‘Breaking into the US market: strategies for UK & European brands’, we heard entry strategies for the American market from Preston Rutherford, Cofounder of Chubbies Shorts; Yael Zwanziger, Brand and Marketing at Organic Basics; and Jamie Bolton, VP of Growth at Fospha.
One theme that came up frequently was that investment in up-front brand building is crucial.
“It’s the brands that focus on building brand from day one –alongside driving sales – that will successfully penetrate new markets. Focusing purely on capturing demand at the bottomof-funnel will prove to be very expensive while your brand is still unknown to customers,” according to Jamie.
It’s important to compartmentalise during the scaling process. Don’t expect your brand to gain immediate traction across all 50 states. Even if you run identical campaigns across multiple territories with similar performance, the actual results will vary.
Brands would also be wise to take notice of the unfolding political situation. Our view: businesses should opt for a more optimistic outlook, with the administration’s ‘wildcard’ nature having the potential to open doors for brands looking to expand stateside.
Want to find out more? Catch up on the full virtual event here.
Luke Jonas, CGO, Nest Commerce
Higher-than-expected CVR boost for retailers
We saw a dramatic increase in results from Meta this peak, with average CVR up by 13% YoY in Q4 2024.
As expected, the fact that BFCM weekend fell later in the quarter than usual meant that CVR remained high into December. This trend continued into the period just following Christmas, or ‘Q5’.
With a bigger cohort of our clients embracing full-funnel than ever before, it makes sense that they reaped the benefits of better sales throughout the competitive peak season.
Full-funnel brands cashed in this peak
Strategies are increasingly shifting up the funnel on Meta as more brands invest in full-funnel across our portfolio.
We saw a 73% increase in upper-funnel spend YoY in Q4 as retailers invested in acquisition in the weeks leading up to peak.
These brands enjoyed a 38% increase YoY in average conversion rate in Q4, versus a 28% YoY decline for BOF-only brands, mastering scale in a competitive market. Meanwhile, full-funnel brands enjoyed 31% higher ROAS.
How BFCM weekend unfolded for FF vs BOF
Both our full-funnel and performance-only clients saw growth this BFCM weekend. However, those that invested in brand building in the weeks and months leading up to peak saw higher spend increase.
Brands that leveraged full-funnel strategies saw 41% higher spend YoY over the weekend, while BOF-only saw a 10% increase.
BOF-only brands lacked the headroom to reach new audiences, while full-funnel brands were better positioned to scale and capture the heightened demand during the weekend.
Sales ads performed better following TOF
One clear indicator that brand building in the lead up to peak boosted sales is the strong performance of creative, highlighting a sales USP for full-funnel brands.
Full-funnel brands saw a 34% YoY increase in ROAS for their Sales USP ads, versus a 29% decrease for BOF-only brands.
In other words, their ads were able to cut through the noise better than brands that were relying solely on BOF ads, with vastly greater results.
KEY TRENDS: REELS
Brands went big on Reels this peak
Paid social has changed: Reels is now necessary for scale on Meta.
Accordingly, Reels were a key part of our clients’ strategies this peak. Spend for the format more than doubled, up by 114% YoY in Q4.
Meanwhile, performance is improving. Reels CTR was up by 70% YoY as audiences adapt to the format, while ROAS up by 25%.
Getting the right creative for Reels is a challenge. It requires a higher volume of content, which is rotated more frequently.
NEST STUDIO AD FOR DAMSON MADDER
Hummingbird drives 20% higher CVR
Deployment of Hummingbird has increased across our portfolio.
Our proprietary tech is the only automated ads optimisation tool built specifically for global ecommerce brands .
It works around the clock, and learns to deliver real-time analysis and optimisation far beyond human capability alone.
By leveraging the insights from £100M of global paid media spend, we ensure that optimisations that work once can be crosspollinated, and optimisations that don’t work can be avoided.
Technology in combination with human expertise will always beat human expertise alone. Our teams train the algorithm, then use its recommendations to refine strategy. It’s a two-way flow of knowledge that continually elevates results.
Then, Hummingbird delivers continuous analysis and optimisation at scale, cross-pollinating winning tactics.
We’ve seen a 20% lift in average CVR for campaigns that have adopted Hummingbird’s recommendations. We only expect this to get better.
+20% higher CVR for campaigns that adopt Hummingbird’s recommendations
KEY TRENDS: PROP TECH
NEST STUDIO AD FOR TRINNY LONDON
KEY TRENDS: CREATIVE
Nest Creator ads deliver 55% higher ROAS
One of the biggest challenges that premium brands face with UGC is balancing the delivery of a clear marketing message whilst maintaining the natural, relatable tone that makes UGC effective. We have developed the Nest Creator Program to overcome this challenge. Brands just need to sign off on a set strategy, creators and briefs. We then start the engine, and optimise.
The results are in: these ads delivered an average of 55% higher ROAS vs brand-produced creative.
NEST STUDIO AD FOR RIVER ISLAND
higher average ROAS for Nest Creator ads vs brand-creative
Nest Creator Program creative vs brand-produced creative
Nest Creator Program creative ROAS
Brand-produced creative ROAS
Big adoption of TikTok during peak
Our ‘funnel-first’ approach to paid media is leading to a greater adoption of TikTok at different funnel stages from previously Meta-first or Google-first brands, with great results this peak.
We have seen a 115% increase in spend YoY in Q4 2024. Meanwhile, TikTok delivered great results over peak, with a 152% increase in average conversion rate in Q4.
Launching TikTok comes with challenges, primarily due to the need for a high volume of a specific type of creative. The Nest Creator Program provides this so brands can scale effectively.
KEY TRENDS: TIKTOK
NEST STUDIO AD FOR NADINE MERABI
+115%
YoY increase in TikTok spend in Q4 2024
TikTok spend QoQ
KEY TRENDS: YOUTUBE
The role of YouTube this peak for acquisition
In the build up to peak, a leading retailer was seeing a decline in new customers. We suggested a series of YouTube ads, alongside higher Meta TOF spend. The brand saw 10.9M unique users in Q4, which supported new customer growth of 354% in the broader Google account.
Meanwhile, a fashion brand wanted to generate brand awareness in the build up to peak. The activity contributed increased new customer growth by 24% in the UK and 29% in the US.
NEST STUDIO AD FOR LEMIEUX
Winners 2025 – a Nest matinee
In 2025, the gap between digital retail winners and losers is becoming a chasm. Market polarisation is no longer just visible – it’s visceral. Companies are feeling it in their bones.
We are hosting a packed schedule of talks, with attendees from 150 retail brands, including Nest clients. 13th March, 1:30pm-7pm
Rich Mix Shoreditch, London
Click here to sign up to the event
What’s happening on Meta?
CPM
As expected, average CPM increased QoQ, spiking by 39%. However, we also saw a big YoY rise in average CPM, with an 11% increase, highlighting growing competition on Meta this peak.
CTR
After several years of declining CTR on Meta as advertisers shifted to video, it is now trending back up. Interestingly, CTR is up both on Reels and non-Reels formats, signalling higher engagement across the board.
CVR
This was a record peak for CVR, with the metric rising 13% YoY above Q4 2023. As expected, CVR was also dramatically higher QoQ, although this was less pronounced on BFCM weekend, where it was up just 1% .
Meta market breakdown
What’s happening on Google?
CTR
Unlike Meta, average click-through rates declined both YoY and QoQ on Google. This decrease was primarily in the UK market, which saw a 39% YoY decrease in engagement.
CVR
Average conversion rate has improved up 16% YoY. Interestingly, it has decreased somewhat QoQ from Q3, despite peak skewing up the latter half of the quarter. This is most stark in the UK market.
CPC
As expected, traffic costs increased by 19% QoQ during the competitive peak season, as brands piled into the auction. Despite this, CPC is actually down slightly YoY, although by just 1%.
Google market breakdown
The Nest Index
The data in this report comes from the Nest Index: our online advertising index that draws on aggregated data from our portfolio of ecommerce clients. It’s used by our teams daily to benchmark your brand’s performance and uncover what’s working, what’s not, what you should do differently, and where you need to be bolder.
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14k+ ecommerce brands countries ads live
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