← DTC Podcast
DTC Podcast
Ep 498: How Tariff News and Market Volatility Are Shaping Meta and Google Ads Right Now | AKNF
00:24:42
Loading summary
Transcript43 lines
- [00:00]
Avery
When we're talking about something like this could really affect the way that people live. Just cramming something to buy down their throats is probably not a very good idea from a brand point of view. So really thinking about like it seems.
- [00:13]
Jacob
Like a lot of the kind of larger brands with the more mature supply chains, they seem to be the ones that are needing to kind of scramble and proactively plan a little more because.
- [00:24]
Doug
I think a lot of brands will be making the mistake of looking at on Google specifically.
- [00:30]
Eric
Anything else Abes, from your side of things on the creative about how brands should be thinking about approaching messaging during these trying times.
- [00:37]
Avery
You're not going to appeal to everyone. So I think sometimes what you see is people feel a little bit gun shy. They don't want to isolate anyone. But.
- [00:53]
Eric
It'S all killer. No filler and today is tariff day. Today is April 9th. So we've just been kind of let off the hook with the no recess reciprocal tariffs announcement and the market has rebounded massively. I'm here with Pilothouse's socials team as well as Dougie representing our Google team. This is the first time in a while we've had a cross platform panel, but we thought today would be a good day to do it. So what do we, what are we seeing in the ad platforms right now? How are you know the market is fully green right now. Are we seeing a boost um, because of this on. Let's start with meta I guess.
- [01:37]
Taylor
Taylor yeah, it's, it's been interesting. Um, I think looking at the different like it, it, it changes quite a bit in real time. So like the last week has actually been quite strong kind of in the, the build up to it from what we've seen a little bit more variance probably this week as, as brand's been kind of navigating things but it's been interesting even like the last couple of days seeing CPM start to start to come down and then we're doing a lot of watching in real time and navigating in real time right now as things continue to shift quite a bit even within the day.
- [02:13]
Eric
What's the reason worth it is that basically you think the little bump we're seeing in conversion rate is that before even these announcements, do you think that was people trying to get purchases in before tariffs hit?
- [02:24]
Taylor
It's definitely possible. I know I can think anecdotally. I know that I know of people that have been thinking that way before kind of different rounds of the tariffs. So yeah it's definitely a possibility and then the tightening of ad spend in all likelihood for increased efficiency is also another potential driver behind the CPM shift too. So it's creating a pretty interesting marketplace on the meta side from the Google perspective.
- [02:49]
Eric
Doug, are you seeing the same thing?
- [02:51]
Doug
Yeah, similar experience and in talking with our kind of Google connections there seems to be a lot of search volume that's unused uncertain around the impact of tariffs, how it's going to impact consumers. And so I think with that uncertainty and the potential fact that hey, prices are going to go up, people capitalized over the last seven days and they're thinking okay, I've got to buy whatever I was willing to buy now, otherwise in a week, two weeks time, it's going to be much more expensive. So I think that's partly the consumer sentiment going around right now that we're seeing impact not only meta but also seeing that similarly reflected on Google less so the cost end of things, but certainly saw around a 5 to 10% scale bump over the past week compared to previous comps on, on the Google end.
- [03:36]
Eric
And now that everyone's breathing a sigh of relief, we'll see the we're so back bump where everyone's like yeah, I'm going to go ahead and make that purchase I was going to hold off of because the markets are crushing and my 401k is back.
- [03:48]
Jacob
Yeah, I mean it's interesting like across 100 and something accounts we were looking at the cost per delivery of the ads went down like 25% and just goes to show you how much people are online right now. Like the active profiles to hit with your ads is very activ right now. So the impressions, the actual traffic to your website, like all that is cheaper right now I'd say on like the majority of accounts from what we've seen. So it's. Yeah, there's probably a few reasons like you said, stocking up potentially. Maybe the tariffs haven't hit them personally yet. They're not actually feeling those price increases yet. But it'll be interesting a week or two from now with some of the recent announcements, you know, slowing it down and it's really just all over the place. And as a brand like you can't really adjust based on those things because yeah, it's just gonna change. Right. So kind of gotta stick to your guns but also just be, be proactive in planning ahead of a lot of this stuff and there's big opportunities to hit on it right now with things like, you know, the angles you're actually taking, which I think a's wants to talk a bit about on and like really taking advantage of that that cheap traffic that is out there right now.
- [04:59]
Eric
Meeting the moment aves what. What are some of the ways creatively that we're meeting the moment for clients with. With tariff based creatives?
- [05:07]
Avery
Yeah, it's interesting. I mean you obviously have to be cautious and depending on who you are as a brand or like the, the Ben and Jerry's out there who are very political and then you're also going to have people who are very buttoned up. But I think it's. It comes down to just really understanding where a consumer's mindset is right now and being able to empathize with the uncertainty that people are feeling. I feel like I speak a lot about no selfish touch points with a consumer and now more than ever you really want to think about how can I add a bit of levity to the situation? And they're doom scrolling. As Jacob was saying, a lot of people are just online right now looking to see what is going on with this international trade dispute. It's a very nice way to frame it but a lot of people just want information so they're gonna be on their phones. And also a lot of the bigger guys in this space aren't able to be as agile both in terms of pausing down spend and waiting for what's going to happen next and also in terms of their messaging. So if you can be reactive and in a way that feels comfortable to you, sort of comment on the chaos of what's going on and how it's affecting people in their everyday life, that's going to drive eyeballs for sure. And what we've seen internally so far is very positive sentimentality when we're talking about something that this could really affect the way that people live. Just cramming something to buy down their throats is probably not a very good idea from a brand point of view. So really thinking about like how can I make this fun and funny to my degree of comfort, sort of comment on what's going on and feel more whole as a brand rather than just again swooping in during this massive market crash and just asking someone to buy your product is not very cute and not very fun and isn't going to drive a lot of that like positive sentimentality. And when we're in an economic space like that, that sort of like favor of a brand really important and drives a lot of sort of pawn stocking activities. It's not even Q4 yet, but Taylor will drop it in there Pawn stocking activities for further down the line when things aren't so uncertain and people are actually looking to purchase. So those are dual ways to do it. You're like, I know Jogo isn't here, but your retention list is also a great place to do this, to have some fun and bring some levity to the situation. Those are people you already know, so you probably understand hopefully what their outlook on the situation will be and you can kind of comment and act accordingly.
- [07:43]
Eric
Interesting. And the thing is, we're like, you know, we're not out of the woods yet. Most, most people who are sourcing abroad are sourcing from China and China still has, you know, that's where really we're. That's where the international trade dispute is centered mainly. Do we have any anecdotes from clients that are sourcing from China and moves that they are maybe making now or moves that they're pondering anecdotally from clients?
- [08:09]
Jacob
Yeah, like on my end. And it seems like a lot of the kind of larger brands with the more mature supply chains that been around, they've got this process dialed in at a large scale. They seem to be the ones that are needing to kind of scramble and proactively plan a little more because it is hard obviously to adjust things like that in terms of like, when you could actually pull the trigger. That's another question too. Like, when are you actually going to make supply chain changes? Knowing that these are going to change could backfire tremendously. So, yeah, it's kind of like in terms of actual, you know, suggestions for, for these brands, it's just really about exploring every option you have, you know, exploring potentials and looking at your size, like it's a lot easier for a brand to borrow 100k versus a brand needing to borrow 5 million on a, you know, flick of a wrist or a flick of a flick. But yeah, I think for the most part that's kind of where we're at. And we're just trying to be proactive. We're hopping on calls with every client, you know, letting them know we're here to support as well, giving them the insights we have. But the internal insights they have are also pretty valuable at this point. It's kind of all over the place, to be blunt, I guess. Yeah.
- [09:28]
Eric
Is anyone advising or is anyone saying like really pulling back? Is anyone just being like, let's lower our ad spend or are people just kind of continuing to stay the course for now?
- [09:36]
Jacob
From what I'm seeing, most people are staying the course. I Think there's probably a few pulling back. I don't know. Has that kind of been your other experiences like Taylor Dougie Aves curious yeah.
- [09:48]
Taylor
I think like generally staying the course because there's so much uncertainty to, to Jacob's point that a lot of brands I think are trying to survey the field right now and then understand like put that plan in place knowing that they have different options depending on kind of how things shape up in the coming weeks. I'd say like slight pullbacks in some places. So start to kind of scrutinize inefficient ad spend more so than you know, potentially months in months past, which is always a good thing for brands to be to be doing anyways. But yeah, nothing too drastic yet from what I'm seeing.
- [10:20]
Doug
Yeah. Similarly I think it's a risk both ways. I think you can have a drastic overreaction and if the tariffs do end up normalizing and things do get hashed out, then you're kind of left holding the bag of oh I overreacted in too short order. Right. So seeing mostly that brands are probably leading a little bit more conservative in terms of their spend but not trying to make any sweeping changes to their ad spend yet until things kind of further settle.
- [10:52]
Eric
Nice. Any other insights on what you're seeing smart brands kind of doing to meet the moment here?
- [10:57]
Doug
Yeah, I'll speak to the Google end I would say and we've talked about this before Eric, but as mentioned where brands are trying to just find a little bit of efficiency, I think oftentimes they're looking to kind of optimize to whatever has the best click attributed return on ad spend. Right. And that's not necessarily a bad thing to do. But I think a lot of brands will be making the mistake of looking at on Google specifically brand campaigns and saying okay, 20 return on ad spend on brand I'm just going to continue investing there and shave off my other investments to kind of accommodate the current landscape. And I think that's a mistake because of all the reasons we've talked about previously. But brand roas not being incremental return on ad spend. Right. So just because something looks strong on the surface does not necessarily mean that's the most impactful for your business. So making sure that brands are analyzing the most optimal level of brand spend and not purely looking at click attributed value in platform to these brand campaigns where again it might not be the most pertinent avenue to go down when again you're maybe just investing into an area that either you're already capping out your brand impression share or adding another brand ad in front of what would already otherwise be an organic click coming through. So just really understanding the landscape scape of your SERP and then adjusting brand spend to the optimal point based on organic rankings as well.
- [12:27]
Eric
Nice. Anything to add there Taylor?
- [12:29]
Taylor
Yeah, I think on the meta side, same type of, type of logic and approach that Doug ease shared or even the paid social side kind of more broadly is making sure that you're looking at what what is truly incremental to your business. So in that case, a lot of the time it's where do you have the most confidence based on the sources of truth that you're using, whether that be looking lift across certain sources MTAs that you're using and then basically being able to say hey, here is our priority based on what is most efficient during a tough time like this where we maybe want to want to tighten up and kind of rein it in a bit and then from there still having that that lens of what is what is going to fuel the business long term and short term in that balance. So that might be for example looking at your highest confidence like click attributed performance from your top of funnel segments and sources and then prioritizing your spend waterfall and testing plans accordingly to max out those those opportunities rather than being spread a little bit thinner across, you know, potentially a wide range of less efficient channels for your brand or some of those kind of heavy duty tests that might might prove costly with a little bit less confidence.
- [13:42]
Eric
I'm just curious on meta, what are we seeing in terms of like platform volatility over the last like even just a slightly longer scale here than what we're seeing in the tariffs. I've heard a lot of chatter about it being a very volatile environment with a lot of the, the changes that they're rolling out with their AI algorithms and their, you know, their offerings. Is, is are we seeing it as a pretty volatile space right now?
- [14:05]
Jacob
Yeah, yeah. I mean it's not as volatile as the stock market, but it's still pretty volatile. Yeah, like their weekly trends, like we said, it's actually kind of been up the past week like in terms of performance, but day to day is pretty hard to get a gauge on and we're not necessarily like we're still doing things like day party and things like that. You know, pausing slower campaigns through the day to kind of preserve like Taylor said earlier, where the unefficient spend is inefficient spend really lean into what is high margins. But yeah that could change the next day. So it's just I'd say really looking longer outlooks a week, two weeks is still important. Try not to get too in the weeds. And yeah this other stuff we talked about just being proactive on that but definitely volatile. CPMs are up and down but at a week basis things are looking decent on the buyer sentiment at least.
- [15:02]
Eric
Yeah, I'm about to release a podcast next week. We did with Segment Stream this Konstantin Yurevich character who came in a couple years ago and had some really hot takes on on attribution. Their platform deals with synthetic conversion metrics. But he this next podcast we're talking about next week was all about Roas is dead. You need to be looking at marginal roas or this idea of understanding that roas all roas isn't the same and that you really need to understand where you are in that like Roas curve and so that to make sure you're not over investing just Taylor, I'm just curious about your high level thoughts about this concept of marginal roas.
- [15:42]
Taylor
I love it. I think it's really important. And a great example I can think of is when you're looking at for example a lot of people now are running Advantage plus shopping campaigns like the legacy style before they became Advantage plus sales campaigns in Meta's recent update. But within that you can see the new audience segment, the engaged audience segment, and the existing customer segment. Now the big question there is should your ROAS be the same between all three of those? Probably not. Are you looking at it through the same attribution lens with all of them? You probably shouldn't be. Because when you think about it like if you're going, you know, if you've got a die hard customer base and you're treating that row as the same as the top of the funnel for an overly simple response that could be problematic for ensuring that you're balancing the nurturing that you need to be doing and acquiring new customers and feeding the entire system to keep growing. So I love it as a concept. I think that's where a really strong understanding of your own business metrics is really important and being able to lay that out and then plan beyond what's at the surface level within a platform like Meta, when you're, when you're looking at the data.
- [16:50]
Eric
Nice. And then Dougie, on the Google side I'm sure that concept, it's again what we keep talking about, about where you're thinking of spending versus your returning customers, your new customers, your engaged customers. Any thoughts on marginal roas in the Google environment?
- [17:04]
Doug
Yeah, I mean it is kind of what I've been labeling as incremental roas when we're comparing brand campaigns to non brand campaigns. And often what we're doing now on our clients that are implementing Elevar is optimizing to new customer acquisition conversion actions themselves as opposed to just trying to exclude certain audiences. Google doesn't do a great job of that. So similarly, if we're thinking of Google primarily for acquisition, we are optimizing to new eyeballs, not just the same old eyeballs who again are coming through brand and likely to reach us organically regardless. So that's kind of another newer avenue that we've been approaching to try and optimize towards what you're referring to as a marginal return on ad spend.
- [17:50]
Eric
I like it because it basically ensures that humans are going to stay in the picture for a long time because these platforms aren't really incentivized to be this smart about how you're thinking about your roas. They want to blend it so it all looks good so you spend more. Whereas Konstantin saying there are instances where you really want to lower your spend in certain areas because you've, you're no longer achieving a high marginal roas. Your roas in a certain segment of the audience is decreasing, but it gets blended by these platforms. So it means humans are going to be in the picture even longer as long as we're thinking about things like this. Anything else Abes, from your side of things on the creative about what how brands should be thinking about approaching messaging during these trying times?
- [18:32]
Avery
I think just knowing, I mean I talk about this all the time, knowing who you're not going to appeal to everyone. So I think sometimes what you see is people feel a little bit gun shy. They don't want to isolate anyone. But you know who your core audience is and you know what they're probably thinking and also how they need that to be communicated. I think right before we started recording we were talking about like bless them, millennials have really been through a lot and now are just sort of burnt out and everything's very funny to that group of people. Or you might have a different outlook for someone who's maybe a little bit older and actually has more to lose. So you probably wouldn't really be joking there. So it's all just about knowing exactly who you're talking to and then being able to deliver a message that hits with them. And again like not fearing, oh, we're going to Sort of ostracize this audience that we were never going to appeal to in the first place. I see that. I love when there's big political stories that I get to like, shout out that experience. But I think that's something you see in politics all the time. If you're not going to attract someone in the first place, you don't have any business talking to them. Move on, cut your losses, Just really go for the people you know are in your camp and be strong and sort of steadfast in the way that you're messaging. It's a lot more attractive than trying to, again, appeal to everyone in a situation that's kind of topsy turvy. And I'm not saying go out there and be really political and don't get an ad approved. I'm just saying you probably have an idea of some memes, some jokes, some things people are doing that you can throw into even like an organic account that will probably help just surface your brand in people's brains when especially over the next few months, people might be a little bit more timid when it comes to purchasing just because there's so much uncertainty.
- [20:19]
Eric
And how do you walk the line? It's funny, we were just looking at some ads for DTC newsletter where you have like the Trump silhouette with the market and this various things like how, how do you walk the line in terms of the Facebook, you know, meta approvals and algorithm. When it comes to getting ads approved, like, what do you definitely need to stay from?
- [20:39]
Avery
It feels pretty simple, like no faces, no actually calling out any kind of scandal or event and naming things. But I always try to be within 2 degrees of separation from something real that could be banned. So it's like turning something a silhouette or an emoji to infer something really easy to do. But that two degrees of separation. So if you want to use a picture of Trump, maybe the first degree of separation is something orange and the second one is an emoji and you're just using like a orange emoji, you know what I mean? To have those like two steps in between the thing and what you're kind of aiming to do from an ads point of view, I think is very helpful. It helps you like run things through a very safe screen in your own mind before getting all your ads rejected. And it should be very simple as well. Like just think kind of critically about what you're saying and yeah, go from there.
- [21:38]
Eric
Have any of our clients raised prices yet? I see some discourse around price raising. I think Price testing is always something that's, that's kind of worth doing. I saw, I've just seen some tweets recently about brands that have raised their prices, you know, 5% and it hasn't impacted their, their conversion rate and at any stretch. And it's like once these tariffs go away, they're probably not going to be lowering prices prices as well. What have we seen anyone doing any price tinkering or price raising during this period?
- [22:05]
Avery
I haven't seen any indirect response yet. I think most people are being like that is one place that it is good to be conservative because like you said, they're probably not going to raise, I mean lower their prices after they've raised them. I did interestingly see some like a client raise prices sort of accidentally a couple of weeks ago and continue to see really strong performance and in fact no impact to CBR and an AOV boost. But I think that was like sheer dumb luck in terms of timing. But I don't know Jacob, Dougie Taylor, if you guys have seen anyone like in response to tariffs raise prices yet.
- [22:43]
Doug
Yeah, not in response yet. There were a few clients who preemptively launched some price changes even before all the major tariff announcements came out. Just given the US Climate politically and concerns around Trump in office. There were some early year and late last year price hikes from a few brands that were kind of expecting some kind of volatility, but none that have kind of since changed and reacted to the more recent globalized tariffs.
- [23:21]
Eric
You've got some of the US Car companies proactively lowering their prices and saying they're going to absorb costs giving employee, I think it was Ford that gave employee pricing for, you know, during this whole period essentially to, to customers, which is a, an interesting way to meet the moment as well. And if you have the margin to spare, it's an interesting play. Nothing from your side, Jacob or Taylor.
- [23:41]
Taylor
Yeah, same same sentiment as as mentioned before from, from mine. I think conversations are definitely happening but because there are kind of those two paths to approaching it and then different ways of messaging it, brands are, are taking some time to kind of think through that and, and see how everything shapes up before, before kind of committing to, to some of those tests and decisions.
- [24:01]
Eric
Nice. Well don't be a panicking which new word coined to the political sphere here, but nice. All right, well thanks for checking in guys. We'll get this out on Friday. Hopefully it helps people, some people meet the moment with, with their brands. Cheers.
- [24:19]
Jacob
Yeah, thanks Eric.
- [24:26]
Eric
Thanks so much for listening to today's. Episode. If you're not a subscriber to our newsletter, you can do that right now @directtoconsumeralloneword.co. i'm Eric Dick, and this has been the D to C podcast. We'll see you next time.