Full-funnel strategies boost ecommerce conversion rates 38%

The latest findings from the ReadOut Report by Nest Commerce reveal a significant shift in ecommerce marketing trends, particularly highlighting the efficacy of full-funnel strategies.

The report, which compiles data from over 40 ecommerce brands managing a collective media spend exceeding GBP £100 million annually, shows that brands adopting a full-funnel approach have experienced a 38% year-on-year increase in conversion rates during the fourth quarter. This marks a notable recovery from the previous year's decline, when brands focusing solely on bottom-of-funnel activities saw a 28% drop in conversion rates.

According to Nest Commerce's research, the resurgence in full-funnel effectiveness on platforms such as Meta has reached its peak in the last four years, despite previous disruptions caused by changes in Apple's iOS 14. This improvement was primarily driven by a 73% year-on-year increase in upper-funnel ad spend in the fourth quarter, as retailers ramped up acquisition efforts before the holiday season.

Will Ashton, Chief Executive Officer of Nest Commerce, described the current state of the market: "2025 is set to be a tumultuous year. Growth is available, but it's not being distributed evenly. 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. Those clinging to outdated, channel-siloed strategies risk being left behind."

Further insights from the report highlighted the success of brands that utilised a holistic strategy encompassing both Google and Meta. Despite an overall spend increase of 113%, these brands witnessed a fivefold increase in search-attributed revenue, underscoring the effective role of search in capturing demand generated by upper-funnel activities.

The importance of creative rotation across platforms was another key point. Brands that actively engaged in platform-specific creative solutions saw revitalisation in their marketing outcomes, with Return on Ad Spend (ROAS) improving by an average of 55% compared to generic content.

Emphasising the need for dynamic video-first content, the report noted that spending on Reels more than doubled on a year-on-year basis in the fourth quarter, resulting in a significant 70% rise in click-through rates. Concurrently, despite concerns over potential restrictions, TikTok remained a priority, witnessing an increase of 115% in spending and a 152% enhancement in average conversion rates.

Will Ashton further elaborated on the outlined strategies: "The playbook for winning is clear and proven by our Q4 data. Brands should prioritise a funnel-first paid media approach, mapping channels to each stage, based on audience and objectives. Strong creative strategy and continuous rotation are essential, using automation for ad optimisation to combat fatigue. Finally, a progressive international strategy is crucial for scaling and mitigating economic risks."

The ReadOut also addresses the strategic significance of international expansion as a means to hedge against domestic economic uncertainties. Companies are urged to focus on brand establishment from the outset in foreign markets to maintain competitive advantage in an increasingly globalised industry.