Ecommerce and Lead Gen Charts: Does media spend correlate with website sessions?

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Does media spend correlate with website sessions? To help answer this question, MarketingSherpa worked with Hawke AI to delve into performance data the company has on thousands of brands.

You can scroll down and see the charts, but first a bit on the methodology for how they got built.

We wanted to see the year-over-year change in media spend and site sessions for the first 10 months of 2023 versus the same month in 2022. We compared year-over-year changes instead of month-over-month changes to strip out the effects of seasonality.

The Hawke AI team started with the 5,916 brands that use its platform. They eliminated accounts that didn't have any media spend currently flowing through Hawke AI (for example, accounts added by SEO-only agencies or ad accounts that are no longer active). They also eliminated accounts that only had media spend and no website traffic data.

That narrowed the data down to 1,387 ecommerce brands and 2,070 lead gen brands that were only comparing the same businesses in media spend and web data over 2022 and 2023.

Ecommerce ad spend down 30%, traffic down 41% in October 2023

As you can see from the above chart, there has been a decrease in media spend throughout most of 2023 for ecommerce brands. And that decrease has been matched by an even bigger decline in website sessions.

Of course, anyone who works with data will know the famous maxim – correlation does not imply causation. Are there less website sessions because less ad spend drives less traffic?

Or has demand been decreasing throughout the year so consumers have been less likely to even organically seek out these ecommerce stores? After all, the decrease in website sessions is larger than the decrease in media spend. “If all other channels were performing consistently year-over-year and paid media was down, the web sessions change would be less than the change in paid media. In most cases though the opposite is true, indicating the decline is also due to broader economic factors and consumer intent driving sessions down, regardless of channel,” said David Bunce, President, Hawke AI.

Rising advertising costs

Another factor could simply be cost. “Sessions change by a greater portion on average than media spend. This indicates that there has been a rising cost of digital advertising over the last year on a 'per click' basis,” he hypothesized.

What can you do if you are facing higher per-click costs? I reached out to marketers to get some ideas, and I like this example from Stephen McAllister, Head of Business Intelligence, Absolute Digital Media. “What we found in the data was that as we pushed more PPC traffic [for an ecommerce client], our CPCs rose and more of the total traffic was coming in under paid media,” he said. “What we discovered for this ecommerce site was that paid media was targeting users who would have most likely converted organically or via other channels. By reworking the paid media to focus on other terms we saw an uplift in organic and direct traffic contribution to the site and an overall ROI benefit.”

Of course, sometimes there are less strategic adjustments to media spend. A company tightens its belt, and budgets simply get cut, for example. When media spending has been cut, where are those cuts taking place? “We would have thought (and in 2022 we did see) the budget allocation be focused on reducing 'awareness' campaigns on paid social channels. In 2023, particularly in ecomm, we have seen more of the budget reductions impact Google and Meta is less impacted. Led gen on the other hand, has made their changes more evenly between the platforms,” Bunce said.

Lead generation media spend up 4%, traffic down 46% in October 2023

There is no correlation between media spend and site sessions for lead generation brands. If anything, there is an inverse correlation.

It could be that the longer sales cycle of lead gen brands means that decreased media spending isn’t felt immediately – for example, you can see a decrease in media spend at the beginning of the year but the decrease in traffic occurring in the later part of the year.

Or perhaps it’s because the longer sales cycle has caused these brands to build a more diverse mix of ways to attract traffic to their sites that focuses more on building a relationship with customers – email marketing, SEO driven by helpful content, organic social media, forums and communities, in-person events, PR, etc. – diluting the impact media spend has on traffic.

Either way, Bunce sees that relationship building as key for both ecommerce and lead gen brands. “There needs to be an emphasis on brand awareness and top-of-funnel investment,” he said. “Marketers have had to understandably get very good at lifecycle marketing over the last few years (for example email is often the highest transaction rate of all channels), so for those companies that have survived the last few years, this is a chance to expand the size of audience for those lifecycle marketing tactics through customer acquisition.”

As someone who has spent his career on the creative side of the ball, I should also mention that media spend isn’t everything. If it were, agencies could simply cut that expensive creative department out (dear holding companies, please don’t do that). This disconnect between media spend and website sessions could be because the ad creative was very bad or very good.

Why would that have affected lead gen more than ecommerce in 2023? My guess – AI. Lead gen companies are much more likely to be B2B, and the growth of artificial intelligence has affected almost every B2B product and service. So messaging about using AI in their product or service might have caused ads to overperform in the beginning of the year when the ChatGPT-driven AI hype was still fairly new, but underperform later in the year as the hype-apathy cycle started swinging in the other direction.

I reached out to marketers and entrepreneurs on media spend and website sessions for lead generation brands, and I thought this next example from a lead gen exec was enlightening.

“From my perspective the relationship between media spend and website traffic is slightly more complex. While there is a correlation, it's not as straightforward as more spend equals more visits. In our industry, the effectiveness of advertising depends heavily on how well the campaign is aligned with our target audience's needs and interests. When we increase our advertising, particularly in specialized tech forums and platforms, we do see an increase in website traffic. Our aim is predominantly to attract visitors who are genuinely interested in our services, which often requires a more nuanced approach than simply increasing ad spend,” said Michał Kierul, CEO, INTechHouse.

And while we have focused on website sessions in this article since it is the next step in the funnel from media spend, that isn’t the end goal for a successful organization. “Reducing our advertising budget does lead to a decrease in site visits, but it's the engagement and conversion rates that are more telling indicators of success. Our focus is always on optimizing our media spend to attract the right audience, rather than just increasing overall traffic,” Kierul said.

This discussion of engagement and conversion brings us to the other famous data maxim – what gets measured, gets done. “Notably, the shift to GA4, emphasizing engagement over traditional metrics, has disrupted lead gen businesses, prompting a reassessment of conversion criteria. Anticipating user familiarity with GA4 by 2024, the ongoing transition requires patience to see its full impact,” said Erik Huberman, CEO, Hawke Media (Hawke AI’s parent company).

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