eCommerce Industry Benchmarks for ROAS and MER
Some very juicy eCommerce industry data has been released by statlas.IO. THE DATA gives us some extremely useful benchmark data from over 230 ecomm brands.
The data is taken from their compiled data from a data set of ~230 ecommerce brands totaling +$2.39 billion in online revenue over the last two years. We can safely assume this is a pretty good representation of the eCommerce market.
Firstly - how does this year compare to 2020, so far?
Weekly Facebook Reported ROAS: year to date compared to last year has gone down by 12%. No surprises there with both a lessening of restrictions plus iOS14 in the mix reported ROAS was bound to go down.
Facebook ROAS 2020 YTD: 2.02
Facebook ROAS 2021 YTD: 1.78
Facebook ROAS YoY %-change: -11.83%
Weekly Marketing Efficiency Rating (MER): year to date, compared to last year has also gone down - by 10.9%. (MER = total revenue ÷ total ad spend; often referred to as “blended” ROAS)
MER 2020 YTD: 5.69
MER 2021 YTD: 5.07
MER YoY %-change: -10.90%
Weekly Average Facebook Spend per Account: Jan.–Nov compared to last year has gone up by 21% - suggesting an industry still in growth mode.
Facebook Spend 2020 YTD: $12,480
Facebook Spend 2021 YTD: $15,108
Facebook Spend YoY %-change: +21.06%
Facebook ad costs as measured by CPM (Cost per 1k impressions): compared to last year are up by a massive 51.81%. This is huge - it means we are likely reaching 30% less people for the same cost as last year.
Facebook CPMs 2020 YTD: $8.46
Facebook CPMs 2021 YTD: $12.84
Facebook CPMs YoY %-change: +51.81%
What about the iOS changes - how has that impacted things?
Firstly - reported ROAS is down by 30% - unsurprisingly.
Pre-iOS Facebook ROAS (Jan.–May): 2.12
Post-iOS Facebook ROAS (June–Present): 1.47
Pre vs Post Facebook ROAS %-change: -30.93%
Interestingly - iOS 14.5 Effect on Marketing Efficiency Rating has been net positive - with brands reporting 5.85% increase in their blended ROAS or MER. My theory is that brands were forced to get better at their organic channels, email, retention, CRO etc because of iOS14 and this has had a positive impact.
I also find it really interesting to see the MER for this huge sample of eComm brands - it's a very useful way for you all to see how your own marketing stacks up compared to the industry average.
Pre-iOS MER (Jan.–May): 4.92
Post-iOS MER (June–Present): 5.21
Pre vs Post MER %-change: +5.85%
So what does it all mean?
My first takeaway is - Facebook advertising got a lot harder - costs are MUCH higher and tracked performance got lower - so it will continue to be a case of survival of the fittest.
My second takeaway is - brands are becoming a bit less reliant on Facebook and working hard on their marketing efficiency and it is paying off - it's really positive to see that despite the tough conditions, overall ecommerce brands are 5% more efficient at acquiring customers!
Do chat about these numbers in your next meeting with your Campaign Manager - we can help you track your MER and see how you are stacking up compared to the industry.
Overall - I am excited by these numbers - it shows that eCommerce is weathering the storm it has been put under lately, and with strong marketing the future looks bright.
DATA SOURCE: www.statlas.io
ARTICLE BY: Jessie Healy, Webtopia CEO
