Season 5, Episode 17: MDM Mailbag #1 (with Taylor Holiday)
Apr 23, 2025
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Taylor Holiday, CEO of Common Thread Collective and a key figure in DTC Twitter, dives into the pressing issues in e-commerce advertising. He discusses how tariffs are forcing brands to change strategies amid declining consumer confidence. The conversation also sheds light on the evolving business models post-COVID-19, moving from percentage-based to fixed pricing. Holiday tackles the skepticism surrounding Apple’s data strategies and the intricate dynamics of mediation in app auctions, emphasizing the need for transparency and innovative approaches in digital marketing.
Recent trends illustrate a significant decline in consumer spending, driven by heightened customer acquisition costs and negative macroeconomic factors.
E-commerce companies are adapting inventory strategies in response to tariffs, with those facing shortages particularly challenged in managing cash flow.
The advertising agency landscape is shifting towards fixed pricing models and enhanced technological integration to better respond to volatile media costs.
Deep dives
Consumer Spending Trends
Recent trends indicate a decline in consumer spending, evidenced by a rise in customer acquisition costs (CAC) across e-commerce clients, which increased by 16% over the last month. Additionally, a Direct-to-Consumer Confidence Index showed a significant downturn in consumer sentiment since early this year, reaching its lowest point in March. These indicators suggest growing reluctance among consumers to spend, which has been an ongoing issue exacerbated by negative macroeconomic conditions and new tariffs. Although the recent tariffs may be contributing to the decline, the broader sentiment about the economy has already been in decline for some time.
Inventory Management Strategies
E-commerce businesses are adopting varied strategies for managing inventory in anticipation of tariffs. Those with abundant inventory may benefit by maintaining prices to gain market share while others with limited stocks face significant challenges, particularly if upcoming shipments are subjected to tariffs. Brands with lower inventory may find themselves in precarious situations, having to manage cash flow and slow down operations to weather the impact of tariffs. Companies struggling with inventory might find it unsustainable to carry on, eventually cutting ad spending until they can resolve their financial outlook.
Auditing Meta Accounts
When auditing a client's Meta advertising account, establishing a clear connection between financial objectives and media strategies is vital. This process involves reviewing existing financial plans to ensure that marketing efforts align with the broader business goals and revenue expectations. A common issue arises when media buyers operate independently of the financial context, focusing solely on short-term performance metrics. Effective auditing requires a comprehensive understanding of the business's objectives and adjusting media strategies accordingly.
Evaluating Advertising Channels
Concerns about emerging advertising channels, such as AppLovin and Pinterest, reflect mixed results in their performance for e-commerce marketing. While AppLovin showed initial potential, recent analyses indicate a decline in new customer acquisition, with many advertisers now viewing it as a low-priority channel. Pinterest similarly struggles to establish itself as a powerful advertising tool, often falling short compared to traditional platforms. The challenge remains for brands to navigate marketing investment effectively among these various channels while focusing on proven alternatives.
Ad Agency Business Models
The advertising agency landscape is evolving as many agencies reassess their pricing structures in response to volatile media costs. A shift from charging based on a percentage of ad spend to fixed pricing models allows agencies to stabilize cash flow and provide consistent value across clients. Agencies that embrace technology to enhance service offerings can position themselves competitively, moving beyond mere media buying to encompass strategic planning and forecasting. This adaptation reflects broader changes in how advertising effectiveness and service costs are evaluated in the industry.
This week's episode of the podcast is in a new format: MDM Mailbag. I recruited Taylor Holiday, the CEO of eCommerce advertising agency Common Thread Collective and a prominent voice on DTC Twitter, to answer questions submitted by the MDM community. Among other topics, those questions related to:
Any visible weakness in consumer spending related to tariffs;
The viability of AppLovin and Pinterest for eCommerce advertising;
The evolving business model of digital advertising agencies;
The appropriate proportion of platform budget to route through Advantage+ and PMax.
Thanks to the sponsors of this week’s episode of the Mobile Dev Memo podcast:
INCRMNTAL. True attribution measures incrementality, always on.
Clarisights. Marketing analytics that makes it easy to get answers, iterate fast, and show the impact of your work. Go to clarisights.com/demo to try it out for free.
ContextSDK. ContextSDK uses over 200 smartphone signals to detect a user’s real-world context, allowing apps to deliver perfectly timed push notifications and in-app offers.
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