Key market considerations for the US
Expanding Paid Social advertising activity into a new market, particularly the US, can be daunting for brands as there are several additional factors to consider in comparison to the UK market. Despite costs (CPMs) being higher, there’s so much potential for growth in advertising to users in the US – the most significant being that macro factors like the pandemic and inflation haven’t stopped consumers from spending in recent years.
Even more recently, US Consumer Spending and Disposable Personal Income have continued to increase in Q1 2023 moving out of Q4 2022, despite it being a peak season of the year. Therefore, if you’re able to reach the right users with your ads, you could unlock the necessary cost efficiencies.
At Journey Further, we’ve found success in the US market for our clients by acknowledging certain key market considerations and applying learnings, whilst continuously testing these in our Paid Social advertising.
What are the key considerations for the US market?
- Locational factors
- The US population is significantly larger than the UK, so instead of targeting the US as a whole, you could initially focus on a few states. Understand which states drive the most revenue for your brand, and then test the top states or exclude the worst-performing to narrow down your audience and ensure your budget is spent on the users most likely to convert.
- Seasonal differences across states. The West and East coasts can have very different weather conditions so, depending on what products you are trying to sell, you may need to show different variations for New York vs. California, for example, to drive strong conversion rates.
2. Audience factors
- Since the population is larger in the US and can differ quite dramatically from state to state, ensure you have enough budget to reach and convert users effectively. You need to achieve 50 conversion events in 7 days to exit the learning phase so ideally your budget should be 50 x CPA; keep an eye on the value once you’ve launched a campaign to work out an estimate on what level of budget is required.
- Although GDPR regulations have removed the ability to target by household income, this is still available for US targeting so it’s worth testing these segments for high-end and luxury brands to find users who have more purchasing power.
- Use high-value customer lists as a source for a Lookalike audience, to give the algorithm more power to find those who are more likely to convert. You can also test going broader (geo-targeting or similarity) to increase the audience volume.
3. Cultural factors
- A language factor in the US is spelling differences, however, it’s typically only worth amending these in ads if the brand’s site is localised.
- Another language consideration is that 13% of the total population are Spanish speakers some of our clients have found success in utilising Dynamic Language features to deliver ads in Spanish (although this is only impactful when the site can also be switched to Spanish).
- You may see fluctuations in performance due to the payday frequencies which are every 2 weeks rather than monthly for the majority of the UK.
- It’s worth keeping tabs on the different bank holidays in the US, as this can impact conversion rates. For example, test ads aligning with Labor Day or Independence Day sales.
4. Barriers to purchase
- If a business has little to no brand awareness in the market it’s worth considering upper funnel (brand) activity before launching, or whilst running direct response conversion activity, as this will help build up audience pools.
- Higher shipping fees and tax/duties when purchasing abroad. It’s important to include in ad copy and/or creative if prices are inclusive of these as this typically results in higher conversion rates.
- Timeframe for delivery. If your business faces issues with slow international delivery this might be a big barrier to entry for driving sales in the US.
- Ease and availability of returns are important for US consumers so it may be worth adding this to ad copy and/or creative if you offer free returns.
- There are a lot more well-known, local competitors in the market so if you have any specific USPs that could resonate well like being a British brand or high-quality production (and therefore worth extra shipping costs) then it’s important that these are leveraged in your ads to help drive cut-through in the market.
Meta also has a cross-border business guide providing some insights and advice here: https://www.facebook.com/business/m/going-global/us.
Although these are all factors to consider, there is no ‘one-size fits all’ strategy when it comes to the US so you do need to keep testing different strategies to see which works for your business.
Please reach out to a member of our team if you’d like to get support in achieving Paid Social success in the US.