This blog is based on a Drive and Convert podcast episode with Jon MacDonald and Ryan Garrow. Listen to the full episode for their candid conversation on iOS 15 and why CRO is more important than ever:
The iOS 15 update is right around the corner.
Like you, we’ve seen plenty of advice and content out there covering what the update is, how it will impact ecommerce, and what other channels brands should pursue to establish a safety net for costs and privacy issues.
But, even with all the ecommerce content floating around on the topic, there’s something crucial that isn’t being considered: conversion rate optimization.
In this article, we’ll cover the perfect storm that brought us to our current reality, how marketers can get smarter in light of updates, and why CRO could be the solution to your challenges.
How data and ecommerce has changed in 2020 and 2021
As my friend Ryan Garrow mentioned on the recent podcast we did on the topic, 2020 and 2021 have been “weird.”
Not only has the world been shut indoors as a result of the pandemic, but the data from the times has been bizarre, to say the least.
For most of 2020, people were forced to do their shopping online. Retail locations were closed and so ecommerce was booming. During the height of the pandemic, many sites got away with poor user experience because shoppers had no option but to purchase online.
Additionally, consumers spent countless hours scrolling on their phones and became more and more comfortable with mobile commerce.
This meant a record year for lots of ecommerce brands.
Then, just as the world started opening in 2021, there was an iOS 14.5 update that limited Facebook tracking abilities. The data that was used to target ads to specific users and track the ways users are engaging with those ads, was restricted.
Not only were more people leaving the house and shopping in person, but as a result of the data restrictions, ecommerce brands were also getting a bad return on ad spend from Facebook.
A real example from an interior decor store
Here’s an example from an interior decor store that has been advertising on Facebook for almost 7 years.
The store’s target audience has always been women on iPhones, and before the April 2021 iOS 14.5 update, Facebook’s algorithm worked. For every dollar spent, the store would get about $3 in revenue.
After the update, every dollar spent resulted in 75 cents in revenue.
The store didn’t have money to burn, so the Facebook ads got turned off.
“That wasn’t an uncommon scenario after that switch [iOS 14.5] happened,” according to Ryan and the Logical Position team.
Unless you are flush with capital, you’re probably still floundering with the iOS 14.5 update, and there’s even more to consider.
The perfect storm is driving CPCs up and transaction value down
So there’s already a perfect storm for this year’s challenges when you look at:
- Decreasing transaction volume as the world starts opening up and people begin shopping in person again
- Challenges with Facebook advertising because of the iOS 14.5 update
- Bad forecasting off of record 2020 numbers, which can set unrealistic expectations
Then there is one final added factor.
In the height of the pandemic, ecommerce sales were through the roof, which meant that even two of the world’s biggest retailers – Walmart and Amazon – were having trouble keeping up with fulfillment.
As a result, they “turned off the spigot” by shutting down their ad campaigns, which drastically reduced the Cost per Click (CPC) in auctions.
Because of this, most of 2020 was a favorable time for brands to run advertising because their costs were down and their return on ad spend was way up.
But now Amazon and Walmart have re-entered the competition for ad space, which means costs are significantly higher and ad performance is lackluster.
Combine that with the recent privacy updates included with iOS 15 and most brands are scrambling to figure out what to do.
Many brands are overspending to make up for the lost results, but instead, you should ask yourself, how can I take the extra money that I need to buy customers in the current landscape and instead use it to build a better online experience that drives conversions?
How investing in CRO can make ad spend more effective
If your site goes from a conversion rate of, let’s say 2% to 2.5%, you just increased revenue 25% without increasing traffic.
So, by investing in CRO, you make better use of the traffic you’re already generating rather than investing more money to produce traffic that may not convert anyways.
With CPCs going up, you need to make sure you give visitors a great on-site experience so you can see a better return on that ad spend.
Check out our CRO calculator to input some numbers from your site and see potential ROI.
Right now, many brands are approaching The Good because they’ve had this realization. They notice that their ad spend is a black hole that isn’t necessarily converting.
Additionally, their site isn’t performing as well as it did last year, possibly because visitors had no other option but to shop online. There were plenty of factors that made it easy for consumers to convert, or I should say, to ignore the items that would prevent them from converting now.
That isn’t the case anymore. Consumers are out, their social calendars are packed, and they have more distractions (and alternatives) to prevent them from completing their purchase.
So CRO is more important than ever. It helps with ROAS and it helps you compete with retail.
As Apple adds privacy with iOS 15, they take away data tracking
Ok, now that we’ve covered how we got to where we are today, let’s talk more about the looming iOS 15 update that’s on everyone’s mind.
A few of the pending challenges for ecommerce managers are:
- Apple is introducing a standard VPN for iCloud accounts. It’s going to make your browsing more anonymous, and data tracking much more difficult.
- Apple will no longer do in-email tracking, so brands won’t have visibility into open rates.
This might sound detrimental to you if your brand relies heavily on external data for success and measurement. But don’t fret. Conversion rate optimization can help here as well.
Our Director of Marketing, James Sowers, spoke to Klaviyo on the topic and reinforced an important point, “[Our] colleagues in pay-per-click and search engine optimization have been dealing with this for years. For the most part, you don’t always know exactly what’s going to work. You have to form a hypothesis, test the hypothesis, and then confirm or deny it.”
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Focus on what you can control: on-site data, user experience, and smart marketing
Use on-site data to measure success
If you don’t already have Google Analytics aggregating data for you, pause here and go turn it on.
There is power in your on-site data. Tracking how people engage with your site, their experience, their customer journey, what path they are taking, how they are converting, and where they are dropping off.. That’s just the beginning.
Heatmaps, click maps, and scroll maps will help you uncover nuggets of insight that will further your understanding.
It’s different from the individual data you’re used to, but you still can understand how your audience as a whole is engaging with your site. That’s more important than ever.
At the end of the day, what matters is the sale. So measuring success based on open rates of emails or click-throughs of ads might be working for you now, but with these changes remember that the ultimate measurement of success is the conversion.
Your website should be an extension of your product and brand
Changes to privacy and data further emphasize something we’ve been saying for a long time: your website is just as important as the product you sell.
Your marketing might be great, and you might have the best product on the planet, but if your website doesn’t make it fun and easy for consumers to make a purchase, they will go somewhere else.
Think about it this way, if you had a retail store 30 years ago, your store is a part of your product. Nordstrom became a success because of their store, their people, their return policy: the entire shopping experience was a ‘product’ of Nordstrom.
If you’re an online retailer, it should be the same. Your website is an extension of your brand and your product.
Get smarter with your promotions and offers
As CPCs and advertising costs go up, brands can no longer afford to devalue their products with discounts and percentages off.
Brands are already losing money driving people to their site, so you shouldn’t and can’t also offer a popup discount when a visitor arrives at your site. Marketers need to get smarter with their promotions, focusing on deals that add value like free shipping, bundle offers, or free gift with purchase.
CRO is the answer to the challenges of data and privacy updates
‘Future you’ will thank ‘present you’ if you begin to invest in conversion optimization now.
Instead of spending more money on ads or worrying about lost data, leverage CRO to combat the challenges of data and privacy updates. We know that CRO works, and we have the client success to prove it.
If you don’t know where or how to get started, sign up for a free landing page assessment below.
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About the Author
Jon MacDonald is founder and President of The Good, a conversion rate optimization firm that has achieved results for some of the largest online brands including Adobe, Nike, Xerox, Verizon, Intel and more. Jon regularly contributes content on conversion optimization to publications like Entrepreneur and Inc. He knows how to get visitors to take action.