Over halfway through Q1?!

Where has time gone? Somehow we’re in the latter half of Q1. Crazy to think.

Lots has happened in just 1.5 months. Here are quick hitting industry updates since we last spoke:

• Stock Market: Meta ($META) & AppLovin ($APP) have been on a tear

  • $META: 20D win streak (all green days); stock up 18% YTD

  • $APP: BLOWOUT Q4 earnings call which teased the focus on ecommerce ads; stock was up 37% in that one day alone and now up 43% YTD. More here.

• TikTok: On Valentines Day, TikTok returned to Apple & Google app stores as Trump assured them that there would be no liability whatsoever for the app stores to list the app again. Trump also reiterated that the 75 day extension could very well be extended AGAIN until a deal is worked out. It looks like TikTok is here to stay. This is not going to fade into oblivion like many talking heads predicted late last year. If you’re not on TikTok right now, you’re simply getting left behind. During times of unrest/unknown is when you typically uncover the best opportunities.

• Shopify Feature You Should Turn on Now: Best kept secret is still Shop campaigns if your brand is on Shopify. It takes <2 min to set up and it’s an easy way to acquire new and lapsed customers. I posted a quick review of how to do it HERE.

1. Meta & Google Ads Performance YTD

2025 has been off to a mixed start. After the best BFCM/holiday shopping season on record, this year has been a mixed bag.

Lets break down what we’re seeing on both of the main channels YTD (Jan 1 - Feb 18, 2025):

Meta

• Spend: +7% YoY & +5% QoQ

• ROAS & CPA: looking at our Top 10 spenders, 8/10 actually have worse performance in ‘25 vs ‘24, but 7/10 increased spend nonetheless. Overall, we’re seeing softness in Q1

• CPM: +24%

• CPC: -28% (CTRs up significantly, accounting for lower cost of traffic to site)

• AOV: +13%

• FB & IG REELS: Biggest spend (& performance) gainers of 2025 YoY.

In summary, brands have increased spend on both a YoY and QoQ basis, which is good news for $META. Seems like performance has generally declined year over year, but AOV is notably higher which makes higher CPA a bit more digestible. However, ROAS is also down at large which accounts for AOV increase. This means that brands increasing prices may actually be impacting performance negatively. Something to keep an eye out for when testing pricing strategies.

Meta is going deeper on Reels, prioritize short form content NOW! Meta is shifting budget from Feed to Reels drastically. Be sure to upload Reels specific content to each ad set where Reels placements are selected.

Google

• Spend: -10% YoY & -22% QoQ

• ROAS & CPA: looking at our Top 10 spenders, half are seeing better performance, half are seeing worse performance YoY.

• CPM: -12% YoY

Google still boring. No real updates here other than BAU. I was hoping they’d make faster progress on being able to test YouTube Shorts content only in Demand Gen. Still not possible. YouTube Shopping/affiliate has also been super slow to roll out and there is virtually no scale there…yet. Seems that YouTube is behind the curve on what performance marketers are looking for.

2. Meta Musings

Wanted to point out a few KEY reminders/issues still widespread on Meta.

1️⃣ MASSIVE BUG on Meta Feb 8-10: Seek Refund if You’re Impacted!

Inspect your account and seek refund from Meta ASAP.

👉 What Happened

Ads Manager showed a MASSIVE spike in conversions (with no assigned purchase values) and Events Manager did NOT show corresponding spike. AKA fake conversions flooded the system.

If you see this happened on your ad account from Feb 8-10: you are impacted.

From Meta:
"On February 8, 2025, at 12:00 AM PDT, a recent configuration change had caused the reporting and ranking issue, and we rolled back that configuration to resolve the issue. The issue was resolved on February 10, 2025, at 4:57 PM PDT."

👉 Ramifications

- If you run Cost Cap campaigns & push high budgets purposely, you got really screwed as your full budget was likely spent.
- Algo got thrown into disarray: during these days, performance at your store level was likely nuked
- Algo will take days to recover, so expect turbulence until the dust settles
- Meta unable to correct reporting data in ads manager retroactively to these dates

Drop what you're doing and check your accounts if you haven't already. Meta always makes right by this and will likely reimburse you.

What sucks is that lots of damage on lost revenue has been felt by brands and will not be accounted for. The cost of doing business!

2️⃣ STOP Wasting Budget on Existing Customers Unintentionally!

I still see so many brands spending money on existing customers without even knowing it. Purely b/c of improper exclusions & audience segment definitions in their ad accounts.

The above example shows an ad set that had 25% of budget spent on existing customers...
❌ yet it excluded: purchasers (pixel), existing customer order export, AND Klaviyo lifetime purchaser audience

Theoretically Meta should have spent $0 on existing customers, right?

Here's the gap: In Meta's audience segments definition, the brand also included Shopify Audience's Existing Customers (this is the ideal scenario)... the ad set did NOT (not ideal).

Here's the difference in audience size between Shopify Audience Existing Customer segment vs the next largest "existing customer" segment: Klaviyo

👉 Shopify Audience: 9,300
👉 Klaviyo: 2,800

Meta ended up targeting a ton of those 6,500 people that were in the Shopify Audience existing customer segment that were in fact not matched in the Klaviyo "existing customer" segment.

This brand utilizes Meta SOLELY for new customer acquisition. And thus, comprehensive understanding and utilization of audience segments is CRITICAL.

Anyone claiming that "audiences" do not matter on Meta anymore simply fails to understand the platform.

The less insight you have on where your spend is actually going (& thus the less control you have), the less effective you'll be at achieving your goals.

Now imagine if you don't have Shopify Audience Existing Customer segment in the "existing customer" definition on Meta... you'd think you're spending $0 on existing customers.... yet in reality a significant level of spend would be going to them in secret.

3️⃣ STOP Firing Purchase Events for Subscription REBILL Orders!

Too many brands are still firing purchase events on subscription rebill orders.
Data & measurement: garbage in, garbage out.

The FOUNDATION of your data & ad accounts is THE most important thing.
Yet so many still get it wrong.

Make sure your pixel purchase event is only firing for purchases, not rebills.

3. The Rise of “Agentic” Commerce

A few weeks ago, OpenAI announced the launch of “Operator & Agents” which is the latest groundbreaking advancement of AI.

This is a graduation from ChatGPT. Instead of just researching & supplying answers, AI can now act on behalf of a user and complete tasks: make reservations, buy tickets to an event, order things on DoorDash, etc.

If you haven’t yet heard the term “agentic” AI, get used to it. You’ll start hearing it daily.

Through an AI agent, you essentially have a copilot/workhorse to complete tasks for you. Consider it your personal assistant.

Now how will this impact the world of commerce?

In many ways, but to classify it in the 2 distinct categories:

• Consumer: personal shopping

  • Need gift ideas? have your agent ideate, present you options, and transact for you.

• Merchant: task completion

  • have tasks you need your agent to complete?

  • want to collect more 0 party data on your customers?

  • want to find potential influencers/affiliates in your existing customer base?

Yeah, this stuff is possible. Bain Capital put out an informative piece on this topic a few months ago.

We’re going to see a massive reckoning in brand strategy and commerce technology.

Brand Strategy:

There’s actually going to be a huge shakeup in the world of SEO. As organic search traffic from Google & Bing diminishes, AI search is where new winners will emerge. As people start deploying their own agents, if your competitors start appearing in AI search results for these non-brand search queries, you could very well start shrinking website traffic & revenue without realizing until it’s too late. It’ll be a slow bleed until you identify this inevitable issue.

The best way to get ahead of this?

By executing against a framework for optimizing your AI search results.

I broke it down: 7 Ways for Ecommerce Brands to Optimize their AI Search Presence HERE.

Is This Ad “Growth Marketing” ?

Saw a lot chatter on the X timeline this week about this ad.

Honestly- the most growth Tecovas probably saw from this creative is from Taylor’s tweet… I joke.

My thoughts:

• This is a solid “television” ad. This would rarely ever be scaled by a brand that is sub multi-9figs in revenue that focused on contribution margin or profit.

• This creative likely cost 100x more than a piece of UGC

• This creative has generated Tecovas their:

  • lowest view count & engagement of any recent post on their TikTok and

  • one of its lowest view counts & engagement on Instagram

  • clearly social platform algos do NOT like this creative organically (& would likely flop on paid as well on key metrics)

• I think this is a “cool” & aspirational creative that will appeal to its target market… but did this creative GROW its TAM? Not so sure. To me, their “Work” line of products appeals to their existing customer base already, whom they already could have reached efficiently in other ways.

  • This makes the creative not useful for the vast majority of brands, especially not on social.

  • Not sure where this creative was meant to live primarily, but I think it would perform best as a Super Bowl type ad spot on a big screen. I DOUBT this creative would grab attention of the short attention spanned audience on social

BOTTOM LINE: This is NOT growth marketing if we’re considering this a pure-play social media creative. Didn’t perform organically & likely didn’t perform on paid if I had to guess. GROWTH = objective, backed by numbers. The numbers publicly available for this creative do not support anything growth.

If this was run as a Super Bowl ad, I’d be more ok with slapping the word growth on it. It would open up their TOF more broadly as most of their TAM is watching the Super Bowl. It clearly didn’t reach their TAM on social.

What I’m Listening to 🎧

Beats of the Week: KITTY AMOR on Keinemusik’s Radio Show (Feb 14, 2025)

Kitty Amor is a rising start in the afro house world. Give this mix a listen. Solid energy, upbeat, and a new artist to be excited about. She also just started her residency on BBC Radio 1. If you like the above mix, give her a listen each week for the next few weeks HERE!

I welcome all feedback. Good, bad, everything in between.

Hit reply, and let’s hear it! 👂

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