US Digital Ad Spend Beauty Brands: Ad Budgets Rise Faster Than Sales in 2024

In 2024, US digital ad spend by beauty brands saw a dramatic surge in investment, an indicator of rising competition and a more aggressive push for visibility in the online marketplace. However, while brands spent more to win attention, the growth in ad spend outpaced the growth in actual sales, painting a compelling picture of a saturated and competitive market.

Rising Spend, Slower Returns

According to the Charm.io data, beauty ad spend in Q4 2024 surged to $46 million, marking a more than threefold increase from the modest $13 million recorded in January. This dramatic rise suggests beauty brands are feeling heightened pressure to maintain visibility, and are turning to paid strategies as organic reach becomes more elusive.

Total ad spend across all product categories followed a similar pattern, skyrocketing from $57 million to an impressive $208 million by December. This trajectory reflects not just higher budgets but a growing dependence on performance marketing to stay competitive.

However, the return on this investment tells a different story. Despite the heavier spend, the gains in sales were comparatively modest. This imbalance is clearly reflected in the proportion of GMV (gross merchandise value) attributed to advertising. In Q4, beauty ad spend represented 18.1% of beauty GMV, up from 16% at the year's outset. Likewise, total ad spend as a share of overall GMV rose to 17.8%, a slight increase from 16.4% in Q1. These figures underscore a critical point: brands are spending significantly more just to achieve incremental sales improvements. The cost of acquiring customers is rising, and without strategic efficiency, even large ad budgets may struggle to deliver meaningful profit.

Why the Shift?

So, what’s fueling the uptick in US digital ad spend beauty brands strategies?

• Increased competition: The barrier to launching a beauty brand has lowered, thanks to digital platforms and direct-to-consumer models. As a result, the market has become overcrowded with both legacy players and indie newcomers vying for attention. This saturation forces brands to spend more just to maintain visibility, let alone grow.
• Platform dependence: Organic reach on platforms like Instagram, TikTok, and Facebook has declined significantly. Algorithms now favor paid content, meaning that brands must invest in digital advertising to reach their audiences consistently. Moreover, beauty consumers are influenced heavily by sponsored content, creator partnerships, and in-app advertising—all of which require strategic budget allocation.
• Holiday spikes and seasonal urgency: Q4 traditionally marks a peak in consumer activity, particularly in beauty due to gifting, Black Friday, and holiday promotions. Brands intensify their campaigns during this window to capitalize on the high intent of shoppers. This temporal pressure drives up ad costs, often requiring brands to increase budgets substantially to remain competitive during this lucrative but crowded period.

What This Means for Brands in 2025

The data sends a clear message to US digital ad spend beauty brands: aggressive ad budgets are becoming the norm, not the exception. As the cost to compete rises, simply increasing spend is no longer enough—it's how that spend is deployed that will determine success.

• Smarter targeting: Generic campaigns aimed at broad audiences are giving way to laser-focused strategies. Brands must harness first-party data and audience insights to serve ads to users most likely to convert, reducing wasted impressions and improving return on ad spend (ROAS).
• Creative differentiation: In a market where consumers are bombarded with visual content, beauty brands must lean into storytelling, personality, and visual identity. High-quality creatives, compelling UGC, and fresh formats such as TikTok-style videos or dynamic product demos can give brands an edge.
• Analytics and attribution tools: Knowing which channels and campaigns drive real conversions is crucial. Brands need to move beyond vanity metrics like views or clicks and double down on attribution modeling, A/B testing, and cohort analysis to fine-tune their strategies in real time.

In 2025, the gap between high-performing beauty brands and the rest will widen. The winners will be those that view ad spend not just as a budget line, but as an investment—one that is measured, optimized, and deeply connected to consumer behavior and brand value.

The Bottom Line on Beauty Brand Ad Spend

As 2024 draws to a close, the trends in US digital ad spend beauty brands highlight a critical inflection point: more budget doesn’t guarantee more sales. Instead, it signals a need for precision, creativity, and accountability. Brands that scale spending without clear strategic frameworks risk diminishing returns and wasted capital.

The winners in 2025 will be those who use every advertising dollar intentionally—guided by audience insights, powered by compelling content, and validated through measurable results. It’s no longer about who spends the most, but who spends the smartest.

To uncover the performance metrics behind the beauty industry’s biggest ad movers, and get ahead of your competitors, request a demo with Charm.io. Access real-time insights, creator analytics, and strategic data that can turn your next campaign into a revenue driver.