Podcast Summary: DTC Podcast - Ep 498: How Tariff News and Market Volatility Are Shaping Meta and Google Ads Right Now | AKNF
Release Date: April 11, 2025
Host: DTC Newsletter and Podcast
Episode Title: How Tariff News and Market Volatility Are Shaping Meta and Google Ads Right Now
Participants: Eric (Host), Avery, Jacob, Doug, Taylor
Introduction
In Episode 498 of the DTC Podcast, the team delves into the pressing issues of tariff news and market volatility, examining their profound impact on advertising strategies within Meta (formerly Facebook) and Google platforms. The discussion brings together insights from Pilothouse's social team, Google representatives, and creative strategists to provide a comprehensive overview of the current landscape for direct-to-consumer (DTC) ecommerce brands.
Impact of Tariffs and Market Volatility on Ad Platforms
Avery opens the conversation by emphasizing the importance of thoughtful brand messaging in turbulent times:
"Cramming something to buy down their throats is probably not a very good idea from a brand point of view." [00:00]
Jacob highlights how larger brands with mature supply chains are grappling with the need for proactive planning due to the uncertainties introduced by tariffs:
"They seem to be the ones that are needing to kind of scramble and proactively plan a little more." [00:13]
Doug points out a common mistake brands make by focusing solely on Google for their advertising efforts:
"I think a lot of brands will be making the mistake of looking at on Google specifically." [00:23]
Current Trends in Meta and Google Advertising
Eric sets the stage by noting the recent positive shift in the market following tariff announcements:
"Today is tariff day. Today is April 9th. ... the market has rebounded massively." [00:36]
Taylor from Meta discusses the fluctuating cost per thousand impressions (CPMs) and the need for real-time navigation:
"CPM start to start to come down and then we're doing a lot of watching in real time." [01:36]
Doug observes a similar trend on Google, citing increased search volume and a potential 5-10% scale bump in ad performance:
"Definitely saw around a 5 to 10% scale bump over the past week compared to previous comps on the Google end." [02:24]
Jacob adds that across numerous accounts, the cost per delivery of ads has decreased by about 25%, making ad impressions and website traffic more affordable:
"The impressions, the actual traffic to your website, like all that is cheaper right now." [03:35]
Strategies for Brands Amidst Uncertainty
Avery emphasizes the importance of empathetic and targeted messaging:
"Understand where a consumer's mindset is right now and being able to empathize with the uncertainty that people are feeling." [05:06]
She further advises brands to add levity and avoid aggressive selling during economic downturns:
"Cramming something to buy down their throats is probably not a very good idea... make this fun and funny to my degree of comfort." [06:00]
Jacob discusses the challenges larger brands face in adjusting supply chains and advises exploring all available options to remain proactive:
"Exploring every option you have... it's a lot easier for a brand to borrow 100k versus a brand needing to borrow 5 million." [08:09]
Taylor recommends that brands scrutinize inefficient ad spend and maintain efficiency:
"Slight pullbacks in some places. So start to kind of scrutinize inefficient ad spend more so than potentially months in months past." [09:36]
Creative Messaging Approaches
Avery shares insights on crafting effective creative content during trying times:
"Knowing who you're not going to appeal to everyone... know your core audience." [07:43]
She advises against attempting to appease all demographics, recommending instead focusing on the brand's loyal audience:
"Not fearing, we're going to ostracize this audience that we were never going to appeal to in the first place." [19:27]
Eric brings up the challenge of navigating ad approvals on platforms like Meta, prompting Avery to suggest maintaining subtlety in messaging:
"Turn something into a silhouette or an emoji to infer something really easy to do." [20:38]
Pricing Strategies in Response to Tariffs
Eric inquires about brands adjusting their pricing strategies in response to tariffs. Avery notes minimal changes:
"I haven't seen any indirect response yet. ... some like a client raise prices sort of accidentally..." [22:04]
Doug echoes this sentiment, mentioning that while some brands preemptively raised prices before recent tariff announcements, there hasn't been a widespread reaction:
"A few brands are probably leading a little bit more conservative in terms of their spend but not trying to make any sweeping changes." [22:42]
The Concept of Marginal ROAS
Eric introduces an upcoming podcast topic on the evolution of Return on Ad Spend (ROAS), specifically marginal ROAS. Taylor enthusiastically supports this concept, explaining its importance in balancing customer acquisition and retention:
"Are you looking at it through the same attribution lens with all of them? Probably shouldn't be." [15:41]
Doug relates this to Google's strategy, emphasizing the differentiation between brand and non-brand campaigns:
"Marginal ROAS ensures that humans are going to stay in the picture... platforms aren't really incentivized to be this smart about how you're thinking about your ROAS." [17:49]
Final Thoughts and Best Practices
The panel agrees on the necessity of staying proactive, maintaining efficient ad spend, and tailoring messages to resonate with the core audience. Taylor advises focusing on high-confidence channels and balancing short-term efficiencies with long-term business growth:
"Having that lens of what is going to fuel the business long term and short term in that balance." [12:28]
Jacob concludes by reiterating the volatile nature of the current advertising landscape and the importance of week-to-week outlooks rather than getting bogged down by daily fluctuations:
"It's just all over the place. And as a brand you can't really adjust based on those things because it's just gonna change." [04:58]
Key Takeaways:
- Proactive Planning: Larger brands with established supply chains need to anticipate and adapt to tariff-induced market changes.
- Efficient Ad Spend: Scrutinize and optimize ad budgets for maximum efficiency, especially on platforms like Meta and Google.
- Targeted Messaging: Focus on core audiences with empathetic and resonant messaging rather than attempting to appeal to all demographics.
- Pricing Strategies: Minimal immediate changes in pricing have been observed, though some brands are cautiously experimenting.
- Marginal ROAS: Emphasizing incremental ROAS helps in making informed decisions about ad spend distribution across different customer segments.
- Adaptability: Stay flexible and responsive to ongoing market volatility, prioritizing both short-term gains and long-term growth.
This episode offers valuable insights for DTC brands navigating the complexities of advertising amidst economic uncertainties and evolving market dynamics. By focusing on strategic ad spend, empathetic messaging, and nuanced performance metrics, brands can effectively meet the challenges posed by tariffs and market volatility.