The Readout Summer 2026: The performance and creative review
The Readout — Summer 2026
The Readout is back. A lot has changed in the eighteen months since our last edition.
The platforms have rebuilt their ad engines around AI, accelerating a shift towards creative as the main lever for performance.
Meanwhile, a new American administration has upended trade conditions, with US tariffs and a war in Iran hitting consumer confidence and energy supply.
Take a deep dive into the trends and opportunities for advertisers in the Summer 2026 edition of The Readout.
A recent article in The Economist suggested that digital advertising may be recession-proof. The signals are mixed. But despite the largest economic shock since Covid, Nest’s clients have seen improved efficiency across Meta and Google, with brands spending more than ever on TikTok and YouTube.
What’s driving that resilience is AI optimisation. Meta’s Andromeda algorithm now evaluates tens of millions of ads for every auction to match the right ad to the right user at the right time. Targeting used to be the lever: define the audience, bid into the auction, let the best ad take the impressions. Now the platforms handle targeting themselves, taking their cues from the creative.
More volume and more variety in hook, format and angle give these algorithms more chances to find the right audience for each ad. The average Nest client ran 443 distinct ads in Q2, up from 282 a year earlier.
At that volume, tracking what works and feeding it back into future briefs matters more than ever. So for this edition, we ran Nest Creative AI, our end-to-end performance and creative solution, across 10,000+ live ads from the portfolio to find out which creative patterns drive performance across categories, not just within a single brand.
Looking ahead to peak, we’re optimistic, whatever the macro picture does next. Meta CPMs sit at a five-year low, and last Black Friday rewarded the brands that spent the summer building creative volume and variety, then testing what worked at scale. Use this summer the same way.
Nowhere is the creative volume challenge more acute than TikTok. It’s the reason many brands dip in and out of the channel rather than committing. We’ll be going deep on exactly that this September, at an event co-hosted with TikTok at their London offices: TikTok unlocked.
Meta CPA falls 22% YoY in the cheapest period for CPMs since 2021
Q1 set the five-year low for Meta CPMs, and Q2, although a touch higher, still came in below every previous Q2 in our dataset, down 16% YoY. Part of that decline is composition: top-of-funnel investment rose sharply across the portfolio, with its share of spend up 79% YoY, and Awareness campaigns carry far lower CPMs.
Creative output across Nest’s client portfolio has also risen sharply, which matters because Meta’s Andromeda algorithm rewards creative volume and variety. And as Andromeda has got better at predicting clicks, CTR has jumped 40% YoY, against a soft wider market. Falling CPMs and rising CTR have both pulled CPC down.
Conversion rates, in contrast, fell 24% YoY and 2% QoQ. Some of that is driven by changes in Meta’s conversion attribution methodology and some is that same shift up the funnel, which brings lower-intent traffic. There’s also a wider market trend, with consumer softness backed up by IMRG and Northbeam data.
And the CPC discount was large enough to outweigh it all: CPA fell 22% YoY.
“Cheaper CPMs don’t turn into lower CPA on their own. Meta can only optimise with the signals it receives, so we keep Pixel and Conversions API event match quality strong, and feed it richer conversion data, including new versus returning customers, order values and LTV signals. Everyone talks creative, almost nobody talks signal.
Cheap clicks change the job of creative too. That means clear pricing, specific claims, objections handled in the ad itself. We will trade CTR for CVR all day, and the landing page has to keep up with whatever the ad promised.
And all of it only counts if spend is bringing in new customers rather than mopping up demand that would have converted anyway. MER and new customer CPA settle that.”
Trust the algorithm, feed it diverse creative
Broad audiences now account for 76% of spend across our portfolio, up from 51% a year ago, while the share going to Lookalike and Interest audiences has roughly halved.
Broad has also become more efficient, with CPA down 32% YoY. ASC mirrors it: CPA down by the same margin, and ROAS more than doubled.
Structure alone doesn’t win accounts anymore. Broad targeting and ASC are available to anyone with an ad account. The edge is in what you feed the algorithm: the right creative, in the right volume and variety, backed by clean signals.
More creative, faster insights
The number of distinct ads across our portfolio has rocketed 57% YoY, with the average brand running 443 in Q2, up from 282 a year ago.
Average spend per ad has fallen 59%, to £371 in June.
At this volume most ads won’t scale, and they’re not meant to. Meta concentrates delivery on a handful of winners, so expect 10-20% of what you produce to scale.
Whether an ad attracts spend in the first place is the quickest signal. If it can’t, kill it. If it holds, scale it and produce fresh executions of the same angle and persona.
Peak starts now
The part of Q4 that needs the most runway is creative testing. You cannot build a creative engine in October. It takes months to learn what volume your brand can sustain, which concepts resonate, and which personas convert.
Last year’s Black Friday results showed what that runway buys. Brands running 2-3x more creative saw CPA fall 14% and revenue climb 38%, on 13% more spend.
Plan the run-up in three phases, anchored to creative milestones:
Prepare (Now–August)
Run the creative tests: volume, concept diversity, USP, format. Lock personas with your brand team. Find what you can actually produce at pace.
Build momentum (September–October)
Ship the engine. Deploy persona-led creative across formats and funnel stages. Build cold audiences for the retargeting pool to harvest in peak.
Maximise conversions (November–December)
No strategic tests, and no messing with the accounts.
Your creative is the new targeting
The algorithm now chooses your audience based on your creative. Meta serves your ad to whoever it looks and sounds like it’s for. That puts creative strategy where targeting used to sit, and it has to cover both what your audience wants and what makes them buy.
Start with a creative strategy tied to your brand’s personas, so the algorithm knows who you’re going after. Then feed it enough volume and variety of creative, localised for each market, to get your ads into more auctions than your competitors. Finally, refresh at pace: ads fatigue faster than ever, so insight to brief needs to run weekly, not monthly.
Most brands fall short on all of it. Brand and performance teams pull in different directions, legacy sign-off processes slow the work down, and the insights that should shape the next brief sit unread in dashboards. Forget 50 ads. We now have brands running 500+, shipping 250 fresh ads each month.
Expect to burn upwards of 80% of test spend finding the winners. Graduate them on conversion metrics, not hook rate or through-play, then feed what you learn back into the next brief and keep the loop running.
TikTok CPMs fall 31% as the channel scales
TikTok is now firmly established as a performance channel, and it’s getting cheaper as it grows.
CPMs have fallen 31% YoY, while spend across our portfolio has climbed 38% and CPA has dropped 10%.
As on Meta, the barrier to entry is creative, but the approach is very different. TikTok runs on a high volume of native creator content, and repurposing generic brand assets won’t cut it. The channel needs its own strategy, built for a creator-first platform.
A Nest x TikTok event
TikTok runs on creative volume. But without insight into what’s working, too much of what you ship underperforms.
Nest Creative AI pairs creative strategy with technology: the data steers creative production, so a higher share of your creative wins. Lower cost per result, and a channel you can actually scale.
Be in the room when Nest Creative AI lands on TikTok, live on a real account, with TikTok on stage to explain why they backed Nest to build it.
To join us at TikTok Kaleidoscope HQ, sign up below to secure your place:
Save your spotBroader audiences, bigger baskets
Basket sizes have risen across the Google estate as brands move towards broader, incremental audiences via AI Max and wider PMax: Google AOV is up 41% YoY.
CPA has risen 26%, but the larger order values more than compensate, with revenue per pound spent up 17%.
“Campaign structure, bidding strategy and audience setup are increasingly standardised across Google Ads.
What moves performance sits upstream: feed quality, CRM segmentation, conversion tracking, creative assets, and how closely the strategy follows your business objectives.
If your product feed pulls straight from Shopify with no optimisation, if tracking is basic, and if CRM data is uploaded as a single audience rather than segmented by value and behaviour, your campaign might look technically sound. But the inputs will be the same as your competitor’s, and the outputs will be too. The gains are in the feed, the tracking, the CRM and the brief. It’s unglamorous work, but it’s the work.”
AI Max delivers, but only on untapped long-tail
Google’s AI Max expands search campaigns beyond existing keywords, using keywordless matching to find queries broad match can’t reach. Across our test portfolio, the results split cleanly by category type.
On niche categories with limited keyword coverage, AI Max found long-tail searches and drove revenue that wasn’t accessible before. One brand scaled Generic Search spend 75% with revenue up 65% and only 5.5% ROAS compression. On saturated categories where broad match already had wide coverage, it pulled in lower-quality traffic and performance collapsed.
That dividing line held across every test. Test it campaign by campaign, not account-wide.
YouTube spend rises 3.46x as brands build the top of funnel
YouTube spend across our portfolio has more than tripled YoY, and is up 25% on last quarter alone. The growth is led by brand campaigns built to reach new customers.
The barrier to entry is lower than most brands assume. YouTube doesn’t need to be always on. It runs well in bursts: a two-to-four-week flight concentrated on a single market or region, built on one strong concept cut into different formats and lengths, then refreshed. Measure each burst on lift before moving to the next.
What 10,000+ ads reveal about creative that converts
Most creative briefs are built on instinct: a photographer’s eye for what looks good, a creative director’s feel for the brand. Nobody has been able to check, across thousands of ads and dozens of brands, which visual patterns actually correlate with results.
We can now answer that question. Nest Creative AI, our end-to-end performance and creative solution, connects to ad accounts and analyses every creative at scale, surfacing patterns that would take an analyst months to find manually. It breaks down top-performing ads into Winning Patterns: AI-extracted insights into which compositions, lighting, colour palettes, subject positioning and messaging treatments drive performance. From there, it synthesises these into Macro Trends that shape the next brief for Creative Production inside the tool.
We normally run this per brand. For this report, we ran it across our entire portfolio. Over 10,000 live ads spanning fashion, health, subscriptions and homeware. The question: which creative signals hold across categories, rather than within a single account? Six patterns repeatedly correlated with better performance.
Show the hands
Hands-with-product emerged as one of the most persistent patterns in every category we looked at. Across the set that meant a model adjusting a cuff, a hand running across wood grain, a case being opened, a book held at reading angle. In the vast majority of cases it correlated with stronger CTR, CVR and ROAS.
The likely reason is that hands make the product feel real. They turn a product image into a tactile experience, helping the viewer imagine owning the item before they buy. If your shots don’t put the product in someone’s hands, that’s an easy gap to close.
Eye contact converts
Direct eye contact appeared as a positive signal in a third of brands, primarily driving conversion rate improvements. It works because it creates an immediate personal connection: the model is looking at you, not past you.
Candid composition helps too. The ad feels like a moment rather than a pitch, and people convert better when they don’t feel sold to.
Nest goes cross-vertical
Nest is now operating cross-vertical. Andromeda demands the same things from every advertiser: volume, variety and a fast insight loop. Everyone is in the same auction.
So this summer we’ve been out talking to finance and travel brands about the challenges they face on paid social. This is what we’re hearing.
Finance: aware, but unsolved
In finance we went further and surveyed 50 UK senior marketers, all spending upwards of £500k a year on paid media. Finance teams already know what Andromeda demands. Unlike much of multi-channel retail there’s no education job to do; 92% say their creative output is at best a stretch against the volume and variety the platforms now reward. They just haven’t built the machine. The most progressive players have moved from a six-monthly creative refresh to monthly, and the front of the market is refreshing weekly.
The numbers show the gap. Two thirds of the brands we surveyed have 50 or fewer distinct ads live at any one time; the average Nest client runs 443. Put budget against live ads and the median finance brand carries roughly £5,500 a month per ad, against £371 across our portfolio. Not enough volume, not enough variety, and rarely an intentional testing strategy behind what does go live.
Creative throughput is the ceiling on growth. We’ve spoken to teams whose Meta CPA is where it needs to be and whose budgets are ready to scale, but spending more means creative fatiguing faster and CPA climbing. Others run weekly testing cadences fed by monthly production, so there’s a permanent lag between insight and the next test. Multi-market brands feel it hardest: one team we met operates in 25 markets but only has the production capacity to use creative as a performance lever in four.
The sector-specific friction is compliance. Sign-off workflows built on PDFs and email chasing, and risk-appetite conversations that stall creative for weeks. More than half of the marketers we surveyed wait three weeks or more to get a finished concept live once sign-off is factored in, and one in five wait more than a month. It’s the problem we solved for Hims by building their compliance guidelines directly into Nest Creative AI, so every ad is generated inside the guardrails from the start.
Travel is sitting on monster headroom
Travel is still conversations rather than numbers. These are businesses built on being exceptional at PPC, running paid social at a fraction of their Google spend. One major OTA we spoke to has grown paid social triple digits year on year, and its first structured creative tests drove 3x conversions at flat CPA inside a week. The CMO’s question was “why haven’t you done more of this?” The answer was creative scale.
Creative scale is exactly what these teams don’t have. We’re meeting brands running eight markets with two designers serving the entire business, and YouTube and Demand Gen sitting underused because the video assets to fill them don’t exist. What travel wants maps onto the loop this report has been describing. Creative insight at feature level: not just knowing which ad won, but which specific elements are converting. Is it the pool, the palm trees or the beach? Insight that carries beyond the performance team into the boardroom, and production fast enough to act on what comes back.
What’s happening on Meta?
CPM is down 16% YoY, the lowest Q2 in our dataset going back to 2021. Despite a 12% QoQ increase, CPMs remain comfortably below historical levels.
CTR is up 40% YoY and 9% QoQ. Engagement is rising across the portfolio, driven by higher creative volume and increased adoption of Reels.
CVR has declined 24% YoY and 2% QoQ, partly driven by changes in conversion attribution methodology. Despite lower CVR, acquisition costs are still down 22% YoY because traffic costs have fallen so much.
What’s happening on Google?
CTR is down 4% YoY and 8% QoQ, partly driven by a significant increase in YouTube investment, where CTR runs naturally lower than on Search.
Although CVR is down 13% YoY, it has improved 4% QoQ, despite consumer softness during the Iran conflict. The recovery is strongest in the US, where CVR is up 21% QoQ.
CPC is up 10% YoY and 25% QoQ as competition returns to search. Meanwhile, AOV is up 41% YoY, more than offsetting the higher traffic costs.
