2024 So Far: A Tough Start, or Just as Expected?

There’s been a lot of discussion on DTC Twitter/LinkedIn lately declaring the year 2024 is off to a rough start. Besides the traditional slowdown expected during the holiday hangover, the consensus is that things are looking a little worrisome for ecommerce as we get the year rolling. 

We’ve got some data that says otherwise. 

Using our database of over 11,000 Triple Whale customers running ads on multiple platforms, we can tell you there’s some abysmal year-over-year comparisons to January 2023, but there are also some interesting positive trends! 

Speaking of 2023, don’t forget to check out The Dive 2023: An Industry Breakdown for $1M+ Shopify Brands!

We’ve collected some data to present to you here, along with some anecdotal evidence from our community partners regarding what works for them and their clients so you can benchmark your own performance in this first month of the year, to make the next eleven more successful. 

First up, Meta.

Meta is Performing Well for Brands Over $1M in GMV

We took a look at data from the first 28 days of January 2024 and compared it to the first 28 days of January in 2023 for clients doing $1M+ in GMV. 

Interestingly, it appears most metrics are trending in the right direction: 

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When compared to Google and TikTok (see below), Meta just looks a little healthier. 

With CPA relatively stable, there’s a nearly 6% increase in ROAS, which means the ads are landing. The increase in AOV also indicates ads run on this platform are successful with driving higher value purchases. But why are the stats heading in this direction? 

Alex Hadding from Bolstered Media posits that the early success on Meta might be due to a push from Meta toward Shops, since they’re embarrassed by how TikTok Shop outperformed them in Q3/Q4 of 2023. 

With larger incentives for Facebook and Instagram shops, this could be a reason for better performance on Meta to start the year. Some brands that Alex manages are seeing 25-45% of their sales coming from Facebook & Instagram, and continued success on these platforms will encourage brands to invest more heavily in these sales channels. 

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Alex says that while top-of-funnel platforms might be working well right now, brands are struggling at the start of the year because of their existing customers, not the new ones. There are many customers stating that a lack of disposable income is the reason for a lack in spending. 

In a similar way, many brands might be tight with their advertising budget, so they’re looking to invest in the best ways to get that ROI.

Google Ads…. Not so Much

The increase in CPA for Google Ads this January compared to last January is, in one word: staggering. 

An 81.54% increase in CPA, coupled with a 19.05% decrease in ROAS, can only mean a painfully poor performance. It also costs more to get a click (CPC), which is a similar trend to what we saw with our BFCM Retrospective. More competition means higher costs and less return, making it difficult for brands of all sizes to be successful on this platform. 

One positive here is that AOV is up nearly 47% for Google Ads year-over-year, which means that customers are making those loaded cart purchases when visiting the site from a Google Ad. As Google is often fantastic for motivated buyers (who are searching for what they want), it can translate well to higher ticket purchases.  

Justin Buckley from ATTN Agency shared that the patterns observed for Google Ads are a familiar trend each January. As we enter the new year, consumers who were in the pipeline already converted (at a discount), so remarketing audiences are drained. Without a new product or incentive to bring your top audiences back after they’ve stocked up, you’re spending more money on ads on people who are resistant to buying (they just did, and they’re paying off their holiday credit card bills). 

Speaking of holidays, January is also a common time for brands to receive a lot of return requests for purchases made in November/December as gifts. Salesforce estimated that $131 billion dollars worth of products purchased during the holiday season will be returned in 2024, which can put brands in a tough spot during the slower buying times. This is a great time to mention that a shipping integration, like ShipBob or ShipStation, would be a fantastic way to manage all of the reverse logistics that affect your bottom line! 

Justin suggests that launching a new product in Q1 is a great way to get people who sat on the sidelines in Q4 to activate - if a discount didn’t entice them, maybe they’re holding out for something brand new and exciting.  

TikTok Falls Somewhere In-Between: Should You Start Shifting Budget From Google?

When comparing January 2024 to 2023, it’s almost all green across the board for TikTok metrics! 

A slight increase in CPA, but pretty awesome increases in ROAS, AOV, and lower CPC and CPM. We also see an 8.70% decrease in CTR, which might be due to the introduction of TikTok Shop - less customers are leaving the platform to purchase from an ad, and instead are buying it right on the spot.  

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BK Cosmetics is enjoying great success with TikTok Shop, with over 100 million sales on the platform. As a low-eight figure brand, they’re still able to compete with Tarte Cosmetics, a $3.87 billion dollar brand with a significant slice of the market share. TikTok Shop is leveling the playing field for brands like BK Cosmetics to reach their target demographic, even in a saturated market. 

Even in a typically slow January, brands that are leveraging TikTok are seeing a higher ROAS from the content they invest in the platform. As TikTok Shop continues to grow in the US market, we’d expect an even higher return and growth for the brands that know how to create content the TikTok algorithm loves to share. 

Seasonality Trends: The New Year’s Resolution Effect?

Since it’s a New Year, New Me kind of time (RIP booze brands… for now), it’s possible many people are using the new year to evaluate what they spend money on. They might even be doing No Spend January, to the dismay of most DTC brands.   

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Alex Hadding adds that if you’ve got a product that speaks to New Year’s Resolutions (like Fitness, Wellness, or Hobbies), then you’re likely already prepared for a stellar January and February. If you’re not in a related industry, you’ll want to get creative knowing that your customer base isn’t going to want the exact same product you pushed them for the last 12 months. 

From our early 2024 data, we can see trends that suit this theory. For example, the ROAS on Meta for Sporting Goods is up 61.59%. The influence of New Year, New Me energy has been used in marketing since the dawn of marketing, so pick up that pickleball paddle and whack your DTC brand into a successful new year! 

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