DTC1050: Google AI Mode Ad Formats and Analyzing 20 Brands

Good morning,

Here’s what you’ll find in today’s DTC:

1️⃣ Google just dropped two new ad formats in AI Mode. Here's how to win on ad placement
2️⃣ We share important stats on how email retention impacts your brand
3️⃣ Are your ads brand centric or customer centric?

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‍🤖 The Secret to Winning Google AI Mode Ad Placements

Google is currently testing Sponsored Stores inside AI Mode, its conversational search product.

Paid placements appear in product detail panels (clearly labeled as sponsored), and a "Direct Offers" format lets advertisers drop a discount directly into the AI response for buyers who look ready to purchase.

This isn’t a new campaign type: it surfaces through your existing Shopping and PMax setup.

Why brands should pay attention: AI Mode is growing fast. Google built it as its answer to ChatGPT's shopping integration, and it's where high-intent shoppers increasingly land.

Putting ads there isn't a test. It's a monetization strategy.

Pilothouse shares the brands winning these placements aren't the ones with the highest bids. They're the ones with the cleanest feeds, the strongest structured data, and the best match between what shoppers ask and what the product page delivers.

It’s the same discipline that drove Shopping performance. The AI wrapper doesn't change what matters underneath.

Here’s how you can prepare: front-load titles with Brand + Product Type + key attributes in the first 30 characters.

The most common feed mistakes? Using promotional phrases in titles, incomplete GTINs, and including data that doesn't match your product page. This is what quietly knocks products out of consideration.

The takeaway?

Brands with clean product data will have an edge in these AI search ad placements.

So don’t wait. Paste your catalog into an LLM, ask it to reformat titles, and you can clean most of these in an afternoon.

‍Email and SMS Drove 3.3x Higher Growth

Jordan from Pilothouse breaks down a 20-brand analysis showing exactly what happens when you add email retention to an omnichannel DTC business.

The data was revealing: Brands using email retention saw 3.3x higher median YoY growth.

So, if you want more revenue and want to grow faster without more ad spend? Email is the lever.

What we cover:

• 2x more brands had growth driven primarily by repeat customers
• Repeat buyer rate improved more often, but not always the metric that matters
• How to use email to reconvert old customers before buying new ones
• Way to treat retention as a MER unlock lever, not just a channel
• Why you should reinvest retention-driven margin into paid growth loops

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‍Little Spoon’s Throwback Trend

The “then vs. now” concept is visually interesting, but the message could read more brand-centric than customer-centric.

Product expansion is meaningful for those working at Little Spoon, but for parents, the real value is how Little Spoon can support their kids for years, not just months.

Reframing this to highlight that Little Spoon now supports families across multiple stages of childhood would make the message more compelling.

For example: evolving from early-stage nutrition to full mealtime solutions.

Another strong angle would be consistency. Emphasizing that despite expansion, ingredient quality and standards have remained unchanged.

The headline could read: 10 years in, countless meals added, but the same commitment to high standards and fresh ingredients.

💡 Pilothouse Tip:

Cater to customers! Not every milestone is inherently compelling to a customer. The strongest Meta ads translate brand progress into clear, tangible benefits for the end user.

‍Allbirds goes all AI? Allbirds, the shoe company, is fully pivoting into AI, reportedly being called NewBird AI. Read more →

AI Zuck. Meta is building a virtual clone of its CEO trained on his voice and mannerisms to interact with employees. Read more →

Reuse your favorite prompts. Google introduces AI Skills, a new Chrome feature that lets you save and reuse prompts in one click. Read more →

The Finnish Long Drink acquisition. White Claw owner acquires celebrity-backed canned cocktail brand for $325M. Read more →

‍📥 Got a B2B Biz?

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DTC Newsletter is written by Rebecca Knight and Frances Du. Edited by Eric Dyck.

Please note that items in this newsletter marked with * contain sponsored content.