Stop Blaming Meta: A Look at Ad Performance in March 2023

If you’re a frequent flier on DTC Twitter (sorry, X…), you may have noticed some discourse around Meta ads in March. 

And when I say discourse I mean outright frustration:

When we took a look at a subset of brands (~3,000 doing $1M in annual GMV) in the middle of the month, things did look a little bleak, with staggering increases across the board for CPC, CPM, and CPA, and a big drop in ROAS.

A variety of accounts shared that they weren't able to log in to Meta’s Business Manager and saw performance issues on their ads. It felt very ‘end-of-times’, and there was certainly something happening in these accounts that was abnormal. 

However, we decided to zoom out to look at the bigger picture and found that the metrics didn’t look much different when we compared the whole month’s performance in 2024 vs. 2023:

To account for seasonality, we pulled the data for brands advertising on Meta in March 2024 compared to March 2023. 

The metrics that you’d expect to tank in an advertising apocalypse were pretty similar to last year or actually better: CPC has gone down (-4.43%), CPM and CPA were only slightly up (+4.93% and +4.38%, respectively). ROAS was essentially the same, while AOV actually went up. For about 5000 ad accounts in this data set, the Meta performance this March compared to 2023 was basically business as usual. 

Perhaps all of the blame being thrown Zuck’s way was a touch overblown? 

To be sure, though, let’s take a look at the Google Ads data for the same period:

We found that Google’s performance was actually worse in March 2024 compared to 2023, with ROAS down (-19.86%), AOV down (-15.24%), and only clickthrough rate coming out as a positive increase (1.61%).

For Google Ads, CPA (+5.76%), CPM (+14.03%), and CPC (+12.22%) were all higher than last year, too. 

Did you notice anybody screaming about Google Ad performance this past month? I didn’t. 

It might just be a case of the loudest minority getting together to bang drums. There might actually be something happening in those specific accounts, but the majority of advertisers on our platform didn’t experience anything out of the ordinary, and in fact experienced worse performance on Google Ads. 

For both Google and Meta ads, however, spend is up with not as much of a return on investment. We think this could be due to a variety of factors rather than just your creative and ad copy itself.

Maybe it’s not Facebook or Google’s fault. Maybe people just aren't buying as much.

With record inflation and interest rates still rising post COVID-19, brands need to understand how these impact shoppers and how purchase habits are evolving. Consumers have higher expectations of the brands they buy from, and many are choosing experiences over items when it comes to purchases. When money is tight, it might mean that customers spend more time in the consideration phase before pressing the Buy Now button. 

While the inflation rates might be evening out, sources indicate that consumers will spend less in 2024. There are a few reasons why this pattern is expected: 

1. Economic uncertainty: Job market fluctuations, geopolitical tensions, and inflation all pile on to make people carefully evaluate their budget. In uncertain times, it’s not uncommon for individuals to opt for more conservative approaches to spending. This means less discretionary spending and less shopping, and definitely less impulse shopping. 
2. High Interest Rates and Debt: According to the New York Fed, personal debt from credit cards, student loans, and mortgages has increased to $17.29 trillion. As a side note, the “buy now, pay later” installment plans available on pretty much anything these days may be catching up with people. 
3. Financial Prioritization: The above two factors roll into this one, where individuals need to make a decision about what their money will go to. Many savvy millennials who used to be on unencumbered spending sprees are reevaluating their debt holdings and choosing to pay down the debt instead of letting it accumulate (myself included). 
4. The Trend of Recommerce: Buying pre-owned is often a win-win for many conscious shoppers, since it reduces the environmental impact and is often cheaper than buying new. It’s all part of reevaluating our need for constant consumption, and sometimes it feels better to buy used over new. 
5. Digital Fatigue: While online shopping was a near daily occurrence during the pandemic when physical stores were closed, it’s like we’re all experiencing a digital hangover. The boomerang has come back around, and now consumers are back to seeking out in-person shopping and physical connections that are only possible at brick-and-mortar stores. 
6. Remote Work: While many workplaces have encouraged a return to the office, roughly a third of all remote workers polled by Pew Research said if it were up to them, they’d work from home all the time. Working from home means we have less need for formal or business attire, which equates to less clothing and accessory purchases. This is good news for athleisure sales, but not the formal brands who relied on offices being full of smartly-dressed employees.
7. Prioritizing Experiences Over Shopping: After spending lots of time at home during the pandemic, people are now restless and seeking out experiences that mean more than smaller purchases. Whether it’s traveling to a new country or attending concerts, sporting events, or local events, consumers are choosing the feels over consumer goods that might not bring as much joy (blame Marie Kondo for that, too). 
8. Focus on Health & Wellbeing: The baby boomers are all going to be 65 or older by 2030, and health-related spending is expected to outpace shopping at this point. With a prioritization of quality over quantity, the health-conscious consumer may choose to invest in higher-quality products like fitness equipment, wellness services, and sustainable or organic foods. There’s been a shift in consumer mentality, emphasizing the importance of self-care and long-term wellbeing over the consistent pursuit of material possessions. It’s probably good for humans, but makes it difficult for certain DTC brands. 

Let’s consider a few reasons why ad performance might be a little lacking across the board in 2024, and what we can do to improve it. 

What is Impacting Ad Performance in 2024?

Well, all of the above-mentioned trends, for one. You might observe higher time to purchase and longer customer journeys, simply because people are spending more time in consideration versus immediately making a purchase. It’s as good of a time as any to reevaluate your customer journey maps to understand how your customers are passing through various stages, and how you can optimize the journey at each step. 

Google’s March 2024 Core Update

In an attempt to reduce unhelpful content by 40%, Google’s March 2024 Core Update made changes to improve search engine result quality and adheres to new spam policies. This is good, since it will target site reputation abuse, scaled content abuse, and reduction in search results pulling up low-quality, unoriginal content. One source discovered sites have been de-indexed from Google because of this. This is bad news for sites using poor, unoriginal content, so be careful when using AI to write your product descriptions. 

Deprecation of Cookies

The cookie-less era is finally here, underscoring the necessity for first-party and zero-party data to understand where your customers are coming from. Privacy policies are getting tighter, and the previous reliance on cookies is almost a thing of the past. Projections indicate cookies will be fully deprecated by Q3 of 2024, and we just entered Q2. So, are you ready? 

Triple Whale gathers first-party data with the Pixel, and zero-party data using post-purchase surveys, enabling you to get a full picture of attribution with a model like Total Impact. 

Changes to Meta Ads Manager

In 2024, the 11 original ad objectives that Meta previously had will be discontinued, which means you’ll no longer be able to duplicate or import campaigns, ad sets, and ads using the original objectives. This might throw a wrench into the marketing plans for brands who’ve had quality ads running for a long period with minimal changes. 

TikTok’s Possible Ban

Just when things were getting good for advertisers on TikTok, there’s a threat that the platform itself could be banned entirely in the United States. This would impact a brand’s ability to extend their reach with potential new customers and utilize a platform that’s being built for conversions. It would be hard to advertise on the platform if it were banned in a country with over 170 million monthly active users.  

How to Improve Ads in 2024

It’s not all gloom and doom - there’s plenty of ways to improve ads in 2024 to ensure you’re reaching your customers.

Test & Iterate Creative: Don’t just run an ad and hope for the best. Conduct A/B testing, determine which creative works, and understand why it’s driving customers to your website (and hopefully converting). 

Optimize Landing Pages: If a customer clicks through to your website and discovers a landing page that doesn’t match what they expected to find, you might end up with a low conversion rate. Your page should feature targeted messaging, a clear value proposition, a user-friendly page with minimal friction, and obvious social proof with testimonials and reviews visible. 

Use Post-Purchase Surveys: Sometimes, surveys can provide better insights than can be gathered through analytics alone, since the customer themselves is telling you which ad or platform they came from. They can also tell you a ton about the effectiveness of different channels or campaigns to help you identify trends and patterns, which can then inform your new customer targeting or retention strategy.

Use Your Data: Don’t just collect information, use it. The first-party data you can collect with Pixel combined with zero-party post-purchase survey data can be used to create lookalike audiences or segments based on lost customers, engaged customers, or RFM (recency, frequency, monetary value) audiences. 

In short, take what’s working and learn from it. Take what’s not working, and learn from it.

Conclusion

It’s easy to get caught up in the discourse on Twitter, and try to blame Zuckerberg for everything that’s going wrong in the world. In truth, it’s not (all) his fault. Plenty of things are impacting consumer spending, including economic uncertainty, financial reprioritization, and a generalized digital fatigue. All hope is not lost, however. There are still consumers out there who want to purchase your product - you just have to ensure you are doing the best you can with the above-mentioned challenges to reach them. Meta ads aren’t dead, it’s not Mark’s fault, and there are plenty of smart things you can do to run better ads in 2024.