Google used to be the front page of the internet.
But in 2023 (and beyond), it’s no longer the first place people search for information or products.
As DTC businesses continue to diversify where they advertise, there may be other platforms that perform better than the old standard of Google Ads (and Meta). The standout for return on ad spend (ROAS) these days seems to be TikTok.
In a recent report, Triple Whale analyzed data from over 11,000 stores to determine how brands advertised (and converted) over BFCM 2023 compared to 2022.
We found some intriguing trends which indicate how brands made the most of BFCM, and how that might differ amongst revenue tiers. For example, does a brand making under $1M do things differently than a brand making over $10M? Most definitely.
When taking a look at the aggregate data, we found that Meta and Google continue to dominate advertising budgets, with nearly 95% of all ad spend dedicated to those two channels.
While there are similarities in where brands spend their advertising dollars, there are differences in how they spend it.
In the <$1M annual revenue tier, for example, we found brands spent a lot more money on acquiring new customers, with a cost per acquisition (CPA) of $18.83 jumping by 69.31% for Google Ads over BFCM 2022 ($11.22).
By contrast, brands making over $50M in annual revenue had a CPA of $22.50 for Google Ads, which was only 12.36% higher than it was for BFCM 2022 ($20.02). This indicates less pressure on acquiring new customers for these established brands, likely more brand awareness, and more investment in creating repeat customers versus targeting new ones.
There were lots of interesting nuggets in the report, and this blog will take a closer look at Google Ads in particular, and what differences exist amongst revenue cohorts.
TL;DR: Google Ads are more expensive than they were previously, and it’s more difficult to convert. Brands still spend a ton of money on Google Ads.
Across all shops in our report, 23.86% of total ad spend during BFCM was allocated to Google Ads, this was down from 27.33% in 2022.
With a 12.7% drop in ad spend year over year, it’s clear that brands are choosing to put less money into Google Ads than previously.
But, why might that be?
It’s more expensive than ever to get eyeballs on your content, with Google Ads’ CPM climbing to $19.03 across all shops (compared to $15.69 in 2022). Brands might simply be choosing to invest in platforms that are more cost-effective (looking at you, TikTok…for now).
It’s also likely that Google Ads’ CPM hike is due to the adoption of Performance Max (PMax) campaigns, which could increase both the cost and competition across ecommerce businesses.
Acquiring customers was more expensive this BFCM than last year, with the average CPA on Google Ads coming in at $16.79 (a 31.01% increase from 2022, at $12.82). According to Wordstream, CPA has risen in 21 of 23 industries they investigated, with an overall increase of 19%.
Cue inflation: consumers are simply having to be more careful with how they spend their money, especially for goods they may consider non-essential. This could mean more browsing, longer times to conversion, and impacts to attribution for longer conversion windows.
Brands aren’t spending a ton of coin on ads that don’t work. Our report found that the click-through rate was higher than 2022, and that Google Ads were the highest converting across all platforms. It might be getting more costly, but it’s still worth it!
Compared to 2022, click-through rate was 11.56% higher on Google Ads for BFCM 2023. This could be due to better ad creative, more compelling deals, or a combination of both. Personally, I believe we’re all just training the algorithms to show us the right kind of ads for things we might actually want to buy, which is both creepy and convenient.
While other platforms try to catch up, Google Ads was still the highest converting platform for BFCM 2023, even with a 17% decrease in conversions from 2022. However, it should be noted that a similar decrease in ad spend (12.7%) may have contributed to this drop.
When someone is searching for a product on Google, it’s likely they already have purchase intent, so it’s not surprising for Google Ads to be a high-performing ad platform.
There’s no denying that Meta dominates in the share of purchases per channel, but Google Ads is very significant with 32.34% of BFCM purchases in 2023 coming from there. However, with a drop from last year’s 44.55% of purchases, it’s possible other platforms are picking up where Google is losing devoted ad spend.
Even with a lower share of purchases, Google experienced the largest increase in AOV (19.33%) from BFCM 2022 to 2023, meaning that customers coming from Google are intentional spenders. Other channels with lower AOV might be better for impulsive, small value orders.
Across all shops, there were some unsurprising trends with how Google Ads performed. Things get a little more interesting when you take a look at how different revenue cohorts chose to invest in Google Ads.
A brand that has under $1M in revenue is likely in the startup phase, trying to learn how to use online advertising to their benefit. It’s possible brands in this cohort experienced bouts of overspending or running ads that didn’t convert as they learned the ropes. The end result? Brands spent a ton of money trying to acquire new customers.
However, most of these funds were spent on Meta. Brands in the under $1M cohort allocated approximately 17.24% of ad spend for BFCM 2023, up from 16.55% in 2022. With a majority of spend allocated to both Meta and Google Ads, it’s likely this cohort is constrained by available funds and chooses to focus on the main two platforms versus diversifying across Pinterest, Snap, and TikTok.
With CPM up 40.13% from 2022, it’s apparent that capturing high-intent buyers in search is very competitive. Click-through rate (CTR) was higher in this cohort, with an increase of 14.28%. With newer brands introducing their products, they could be pushing compelling ads or deals that attract clicks. While Google remained the highest converting platform overall for brands with revenue under $1M at 5.63%, there was still a 27.58% decrease in conversion rate from BFCM 2022. It’s possible searchers are choosing larger, more established brands in 2023 compared to 2022.
Cost per acquisition (CPA) in this cohort was 69.31% higher than BFCM 2023, and a much higher increase than other platforms to get eyeballs on ads (except for Snap, which had an unheard of 240.29% increase in CPA year over year). In a similar trend, the conversion value (CV) for this cohort decreased by 22.45% year over year. With only 20.13% of total purchases attributed to Google Ads, the 39.02% decrease year over year indicates the platform is less efficient for ad spend than previously. Brands in the < $1M in revenue cohort should take note of these high costs and put consideration and thought into the ads they run.
Interestingly, Google Ads had the highest average order value (AOV) for this cohort. As previously mentioned, customers who know what they’d like to buy are often ready to purchase a larger amount immediately when they don’t need convincing it’s the product they need.
Brands in the $1-5M revenue cohort appear to be adjusting where they allocate their ad budget, with more investment in platforms other than Google Ads. While Meta remains the main platform of choice, second-place Google Ads accounted for 23.01% of ad spend for BFCM 2023. While the CPM had a significant increase in this cohort, it’s still less than the aggregate increase of 21.3%. Google Ads had a significant drop of 34.35% in conversion rate (CR) compared to BFCM 2022. It’s possible this cohort invested too heavily in less effective traffic sources or expanded into new ad formats with traditionally lower conversion rates (like YouTube and the Google Display Network).
CPA was significantly higher for the $1-5M revenue cohort, with a 66% increase year over year (which was much higher than that of the aggregate). This steep rise might be due to increased competition and more shoppers looking for deals, equating to higher click-through rates (but less conversions).
The $1-5M cohort also saw Google Ads’s conversion value (CV) declining by 21.49% while Meta grew by 16.57%, suggesting a possible shift of conversion from one platform to the other. At the same time, 34.55% less total purchases were attributed to Google Ads in 2023 compared to BFCM in 2022. Google Ads have introduced more display and video ads, which typically have lower purchase intent than search. On the other hand, Google Ads had the highest increase in AOV by channel, growing by 57.14% for BFCM 2023. It’s possible brands in this cohort chose to drive those higher-value purchases through targeted ads.
As the brands grow, they spend more on advertising as they pull in more revenue. In the $5-10M revenue tier, paid channel spending rose by 29.5% overall. When it came to total ad spend, this cohort was very similar to the aggregate with 24.96% of ad spend by channel earmarked for Google Ads (aggregate was 23.86%). Similar to the aggregate, a very high amount of ad spend was devoted to both Meta and Google, with over 80% of revenue driven from those two channels. An interesting finding was an increase in conversion rates (up by 7.64%) for Google Ads, which is a notable difference in channel efficiency. It’s possible that when brands hit this higher revenue tier, they’re more likely to be established brands that savvy consumers will seek out for BFCM deals rather than buying from lesser known brands.
With CPM up 27.31% year over year, Google Ads were more expensive than during BFCM 2022, although at $18.27 it was still slightly less than the CPM for the aggregate ($19.03). Click-through rate (CTR) was slightly higher than BFCM 2022, but it is still important for brands to focus on crafting compelling content or refining their targeted ads.
Interestingly, the $5-10M cohort was the only one to see an increase in conversions on Google Ads, with a 5.47% increase. In contrast, most cohorts posted a decline in conversion rates (with the highest decline of 27.58% belonging to the $1-5M revenue tier).
The conversion value for Google Ads was down 9.25% from BFCM 2022, but was still higher than the aggregate (32.94%) at 37.20%. With the total ad spend for Google Ads coming in at 24.96%, it’s clearly valuable for this cohort to invest in this platform. This is further supported by 37.52% of purchases by channel being attributed to Google Ads. This cohort also had a 5.64x return on ad spend (ROAS), which was the highest across all platforms for BFCM 2023.
Brands in this cohort are established and often well-known, but similar strategies exist to the aggregate (read: lots of favoring Meta and Google Ads). In contrast to smaller brands, however, TikTok appears to be a bigger piece of the puzzle for this cohort (more on this later). In general, it indicates that as brands grow and have higher revenue, they are able to be more creative with their marketing investments than they may have been previously.
Spend for Google Ads amounted to 24.91% of total ad spend for brands in the $10-50M cohort, which aligned with the trends for the aggregate. There was an increase in CPM year over year for Google Ads as well, suggesting there was a greater emphasis placed on non-brand search campaigns for this cohort, which are more competitive and cost more. Unlike the other cohorts (at 11.56%), Google Ads had a 23.16% increase year over year. It’s possible that at a higher revenue tier, customers have higher brand awareness and are more likely to click on ads from known brands.
The conversion rate for $10-50M brands running Google Ads was 8.09%, which was higher than any other cohort. This is likely due to more recognizable brands converting on non-brand searches due to that increased brand awareness. These conversions accounted for 34.77% of purchases across all ad channels. This cohort also had a higher than aggregate return on ad spend for Google Ads (6.05x vs. 5.48x), which indicates the larger brands in this cohort are more efficient in their advertising efforts.
Big brands = big advertising dollars, but similar trends in ad spend, with 90% of all spend split between Meta and Google Ads. With 29.33% of total ad spend dedicated to Google Ads, the over $50M cohort spent slightly more on Google than the aggregate (23.86%). Additionally, there was only a 0.20% decrease in ad spend on Google than for BFCM 2022, which indicates that very large brands tend to keep their strategies similar year over year (if it ain’t broke, don’t fix it).
The total conversion value for Google Ads came in at 32.53%, which is actually quite low when compared to the conversion value for Meta (56.87%). Once brands are operating in the $50M+ revenue tier, they are well-versed in what works for the standard advertising platforms and have a little more room to play with newer ones (more on the TikTok factor later!).
The conversion value for Google Ads at this revenue tier dropped by 17.22% from BFCM 2022, indicating investment in alternative platforms might be having an upswing. However, the conversion value is very similar to that of the aggregate (at 32.94%). Even if $50M+ brands obtain 30.46% of total purchases from Google Ads, there was still a decrease of 17.01% from Google Ads during BFCM 2022. This also indicates that strategies are changing, and will likely reflect more investment in platforms like Snap and TikTok in the future. A diversification strategy is useful for leveraging unique and new audiences to grab new customers.
In conclusion, the data in our BFCM retrospective demonstrates a significant role for Google Ads in the advertising strategies of businesses across various revenue tiers.
The investment in this platform consistently accounts for a substantial portion of total ad spend, and it's a key contributor to revenue generation. Google Ads still accounts for 28.4% of all ad revenue in the United States, but the year-over-year trends suggest that brands, particularly those in the higher revenue brackets, are starting to diversify their advertising investments. Newer platforms like TikTok and Snap are gaining traction, reflecting a shift in marketing strategies to tap into different audience demographics.
This highlights the dynamic nature of the digital advertising landscape and underscores the need for brands to stay agile, adapting their strategies to evolving consumer behaviors and market trends.
If you’re curious how your BFCM data stacks up to our aggregate data from over 11,000 Triple Whale brands, download the report.
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