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Meta says that a study conducted in early 2024 shows that US advertisers earned an average ROAS of $3.71 per dollar spent on Meta platforms – a 12 per cent increase from 2022. Many founders, though, say that they no longer see the returns they once did on paid ads. Poppy Lissiman started her eponymous label in 2008 as a ready-to-wear brand — pre major digital advertising opportunities. In 2014, she pivoted to accessories, launched her e-commerce store and began to dabble. It was in 2016 that Lissiman embraced what she calls the ‘modern digital marketing landscape’. At peak times, Lissiman has spent up to $250,000 a month on meta ads alone. “As a mostly direct-to-consumer brand, digital advertising has been essential to our business, ramping up significantly during Covid, and year-on-year since then,” she says. Prior to the iOS update, this $250,000 monthly investment generated over sixfold ROIs (over $1.5 million). “Unfortunately, in today’s digital marketing climate, we’re no longer seeing returns at that level.”Hit It Here Make Zack Hampie Jealous Target Baseball Shirt
Pia Mance, who launched accessories brand Heaven Mayhem in 2022, initially dipped her toes into paid advertising with a “tiny” daily budget of $15 on Meta. “To my surprise, those ads worked wonders, bringing in new customers at an incredibly low cost of just $2.50 — which is crazy for our price point,” she says. Now, Heaven Mayhem delivers ads across Meta, Google, TikTok and Pinterest and reinvests anywhere between 5 to 20 per cent of its monthly revenue into digital advertising (depending on the launch calendar and monthly strategy). She was always wary of investing too heavily in paid digital ads, she says, thinking of these instead as a ‘nice bonus’. Now, she’s thankful. “In more recent months, the digital advertising landscape has definitely become more competitive and less efficient,” Mance says. Elena Bonvicini, founder of Los Angeles-based label EB Denim, has observed the same shift. She only recently began using paid digital advertising as a tool, and wishes she’d gotten in sooner. “There has been a huge slow down in conversion,” Bonvicini says. “In talking to my friends in the industry, a seven to tenfold ROAS seemed to be the norm, now we are lucky if it’s a fourfold.”
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