DTC Podcast Summary: Bonus Episode on Navigating Q4 Uncertainty with Justin Jefferson

Release Date: July 23, 2025
Host: DTC Newsletter and Podcast
Guest: Justin Jefferson, VP of Strategy and Insights, Keen Decisioning Systems

Introduction

In this bonus episode of the DTC Podcast, host Eric Dick engages in an in-depth conversation with Justin Jefferson from Keen Decisioning Systems. The discussion centers around how over 600 direct-to-consumer (DTC) brands are navigating the volatile Q4 environment characterized by tariffs, margin pressures, and potentially softening demand. The episode delves into strategic planning, forecasting, budgeting, and the effective use of marketing channels to scale amidst uncertainty.

State of the DTC World Heading into Q4 2025

Justin Jefferson opens the discussion by highlighting the prevalent uncertainty facing DTC brands as they approach Q4. He emphasizes the chaotic nature of current market conditions and warns against overreactive measures.

"Uncertainty is probably the hot buzzword. I think we hear people switching back and forth from what they're trying to do, what they're thinking about... there's really just a lot of different chaos out there and people... may be getting a little bit too aggressive with some of their moves."
— Justin Jefferson [00:00:00]

Jefferson stresses the importance of strategic planning over knee-jerk reactions, encouraging brands to remain thoughtful and adaptable in their approaches.

Survey Insights: Approaches to Q4 Uncertainty

The core of the episode revolves around insights from a survey conducted with over 600 DTC brand operators. Justin outlines two fundamental strategies brands can adopt in uncertain Q4 conditions:

1. Pulling Back: Many brands opt to reduce their marketing spend in response to uncertainty. This conservative approach is common but may lead to missed opportunities.

2. Doubling Down: Alternatively, some brands choose to increase their marketing efforts to capture market share while competitors pull back.

"The one way... is to pull back... They start hacking away at channels. Right, which is never really what you want to do. That's the knee jerk reaction."
— Justin Jefferson [00:05:07]

"The other side of the coin... is zigging. When everyone's pulling back... that allows you to do that in more strategic timing and positioning."
— Justin Jefferson [00:05:07]

Jefferson advocates for the second approach, highlighting how strategic investment during uncertain times can lead to greater brand visibility and market dominance.

The Role of Forecasting and Keen's Tools

Jefferson explains how Keen Decisioning Systems supports DTC brands through sophisticated forecasting and modeling tools. Keen's software builds Marketing Mix Models (MMM) that analyze historical data, sales, financials, marketing investments, and external factors to provide actionable insights.

"At the base sense, we offer a software that really helps you build kind of an MMM model from a historical perspective... We want to take into account what is helping to drive your sales, not only your marketing, but everything else as well."
— Justin Jefferson [00:02:48]

These models enable brands to forecast different scenarios and optimize their marketing strategies based on their specific objectives, whether it's maximizing revenue, profitability, or long-term growth.

Planning and Contingency Models

A significant portion of the conversation focuses on the importance of contingency planning. The survey revealed that while 58% of brands adjust in real-time, only 20% have established contingency models.

"Most of them don't have that ahead of time. And the nimble can also be associated with reactive."
— Justin Jefferson [00:09:02]

Jefferson underscores the need for brands to develop strategic, forward-thinking plans that account for various potential market conditions. By modeling different scenarios—such as best-case and worst-case category growth—brands can better prepare for unexpected shifts and allocate their budgets more effectively.

Margin Pressure Insights

The episode delves into how brands are handling margin pressures exacerbated by tariffs. The survey found that 32% of brands are raising prices, while 40% are cutting costs to manage reduced margins.

"People are trying to either pass it on or they're going to try to eat most of it."
— Justin Jefferson [00:15:57]

Jefferson discusses the delicate balance brands must maintain between maintaining profitability and avoiding diminished demand. He emphasizes that raising prices without a corresponding increase by competitors can make a brand less attractive, especially for those without strong value propositions.

Confidence in Forecasting: Scale Matters

Confidence in Q4 forecasting varies significantly with the size of the brand. Larger brands (those exceeding $5 million in revenue) exhibit higher confidence levels compared to smaller brands (under $1 million).

"They're a lot less nervous... they understand how to plan around this and know what they're going to be willing to do."
— Justin Jefferson [00:20:08]

Jefferson notes that mature brands leverage their experience and established strategies to navigate uncertainties more effectively, whereas smaller brands may struggle with forecasting due to limited data and resources.

ROAS Challenges and Alternatives

Return on Ad Spend (ROAS) has traditionally been a key performance indicator for marketers. However, the episode highlights challenges with relying solely on ROAS, especially in a multi-channel environment where incremental impact is harder to measure.

"People treat ROAS like a warm blanket that keeps them safe at night... but it misses so much."
— Justin Jefferson [00:22:51]

Jefferson recommends focusing on Marginal ROI (MRI ROI) instead, which assesses the return on the next dollar invested, providing a more dynamic and long-term view of marketing effectiveness.

Budget Shifts: Experimental vs. Proven Channels

The survey revealed that 17% of brands are scaling back their experimental budgets to focus on proven marketing channels. While reallocating funds to successful tactics makes sense, Jefferson cautions against entirely abandoning experimentation.

"If you don't do that testing and learning, you're going to start Q1... without those insights."
— Justin Jefferson [00:25:57]

He advocates for maintaining a balanced approach, ensuring that a portion of the budget continues to explore new channels and strategies to stay ahead in a rapidly evolving market.

Recommended Channels and Strategies

Jefferson highlights underutilized channels and innovative strategies that brands should consider integrating into their marketing mix:

• Streaming and CTV/OTT Advertising: Enhanced targeting and CPM control have made these channels more effective.

• Digital Audio and Podcast Advertising: Traditional radio is making a resurgence in digital formats, offering new avenues for brand visibility.

"We've seen a lot of fun experimentations and really good performance out of streaming video and podcasting."
— Justin Jefferson [00:26:53]

These channels provide diverse ways to reach consumers and can complement existing marketing efforts by broadening brand awareness.

Case Studies and Anecdotes

Jefferson shares success stories where Keen's forecasting tools enabled brands to make informed decisions, leading to significant improvements in revenue and market positioning. One notable example involved a brand facing manufacturing delays; through scenario modeling, they optimized their marketing spend to align with inventory availability, resulting in exceeded revenue forecasts.

"They were able to drive so much more value out of that. The revenue forecast kind of exceeded what they initially forecasted."
— Justin Jefferson [00:28:22]

These anecdotes illustrate the practical benefits of strategic planning and the effective use of forecasting tools in mitigating risks and capitalizing on opportunities.

Conclusion and Final Advice for Brands

In his closing remarks, Jefferson emphasizes the importance of continual optimization, testing, and evaluation of marketing strategies. He urges brands to:

• Optimize and Test: Regularly assess and adjust marketing tactics to improve ROI.

• Balance Spending: Avoid over-investing during peak periods while neglecting off-peak times.

• Stay Consistent: Maintain brand presence continuously to ensure long-term growth and quick recovery post-peak seasons.

"You can make much better decisions with your money and get a lot greater impact out of it."
— Justin Jefferson [00:30:43]

Jefferson encourages brands to align their strategies with their business objectives and remain flexible to adapt to changing market dynamics.

Final Thoughts

This episode of the DTC Podcast offers a comprehensive analysis of the challenges and strategies relevant to DTC brands heading into Q4 2025. Justin Jefferson's insights, backed by survey data and practical examples, provide valuable guidance for brands aiming to navigate uncertainty, optimize their marketing efforts, and sustain growth in a competitive landscape.

For more detailed insights, listeners are encouraged to explore the full survey report available on directtoconsumer.co.