Many of our customers want to know - are FB Ads acquisition costs increasing for everyone else, too?
So we decided to dive into the data, focusing for this post on the Apparel & Accessories vertical. This analysis is based on 55 DTC Apparel & Accessories brands spending an average of $100k per month on FB Ads, all of whom are users of Varos - a platform that anonymously provides real-time digital marketing KPI benchmarks to DTC brands.
As you can see in the chart above, the TL;DR is yes, CPAs are increasing for everyone.
DTC Apparel & Accessories companies went from a median Cost Per Purchase of $42 in March 2021 to $112 in Sept. 2021, a 168% increase in just 6 months!
As alarming as these trends are, take comfort that it’s not just you and there are still paths to acquiring customers efficiently via FB. These metrics are fluctuating on a weekly basis, so use Varos to keep an eye out for where this rollercoaster will go next.
There were many factors that impacted the spike in CPAs, but the most significant one was a plummet in Conversion Rates. In the chart below, you can clearly see that from April 2021 to Sept. 2021, the CVR has been decreasing significantly, landing at about half of what it was.
Digging in by a different dimension, we can see the trending increase cost per purchase is similar across targeting types. Interestingly, Retargeting Campaigns have leveled off in the past few months, while Prospecting and Lookalikes continue to climb.
The elephant in the room is the IOS 14.5 update, which dropped in April - just around the time that we see these trends starting.
With Varos, you can maximize FB Ads ROI by analyzing these metrics and many more, broken down by sub-industry, vertical, targeting types, date ranges, and much more. You can see how you stack up compared to similar companies, and find your specific areas of improvement so you can get the most from your ad budget.
As the holiday season is coming up, we’ll be monitoring the market closely. If you also want real-time market data, shoot me an email at firstname.lastname@example.org for access to the platform.