DTC802: Reallocating Your Advertising Budget

Good morning,

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

💸 Make Smarter Ad Budgeting Decisions
Reallocate without regrets using these tactics.

🤝 Build Customer Relationships in 2025
Learn how to drive loyalty without eroding margins.

📦 Tariff News Roundup
Catch up on all the major trade war stories last week.

😮 ChatGPT x Shopify Team Up
Why this potential partnership could change ecommerce forever.

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You’re reading this newsletter along with new subscribers from: Workweek, Finix, and American Hospital Association. 👋

🛒 Ready to Convert Followers Into Customers?

Social followers are like window shoppers. 👀

Your brand’s caught their attention. They like what you’ve got going on. But admiration alone won’t boost your bottom line. 📈

So, what’s your next move?

Find out with Klaviyo’s new guide, “3 Ways To Grow Your List with Social Media,” created in collaboration with their partners at Gatsby. It covers proven tactics to help grow your email and SMS subscriber lists. 🚀

From giveaways and early-access offers to always-on campaigns, these are techniques your brand needs to know about to turn social media momentum into actual growth. 💥

They’re backed by stories from brands who’ve been there, done that, and achieved seriously impressive results.

So can you. If you’ve already built up a social following, you’re halfway there. It’s time to see it all pay off. 💵

Start converting social followers into subscribers today.‍

💸 Make Budgeting Tweaks Without Hurting Conversions

Looking at the budget sheet and wondering how to reallocate your ad budget during tariffs?

The first instinct is to allocate more budget to the top revenue channel, but it isn’t always easy.

If you are an omnichannel brand, this can hurt conversions.

Ash from Obvi shares these insights below:

A customer discovers your brand via an Instagram sponsored post, visits your website, and then purchases the product on your Amazon store.

Allocating more money to your Amazon store and decreasing spend on Instagram and Shopify might not make sense since these are all critical components of your customer journey.

Take a close look at your customer and their path to purchase to decide where to make cuts and where to double down on spending.

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Budget allocation tactics:

1️⃣ Pay attention to these metrics: Look at net profit per customer per channel, not just top-line revenue.

2️⃣ Analyze customer surveys: Dive into your surveys or polls and determine where customers heard of you. This is your first touchpoint and crucial for driving more new customers.

3️⃣ Do some testing: Shift budget to your key acquisition channels and see how that affects your sales.

4️⃣ Regularly track budget changes: Study how this impacts net profit and the quality of customers you get across channels.

How are you revising your budget to account for economic uncertainty?

🤔 Getting Likes and Follows on Instagram—But Not Much Else?

You’re not alone. But smart brands are turning social engagement into serious growth.

📈 Bailey’s CBD hit an 83% subscriber conversion rate.
🎯 Kulani Kinis drove SMS growth with early access codes and Meta ads.
💸 Evereve landed 1.4K new subs—and $500K in sales—in days.

How? With the right follower → email and SMS list-building plays.

Klaviyo’s new guide breaks down 3 proven strategies to grow your email and SMS lists straight from social.

Ready to turn followers into customers? This is where you start. 👇

📦 ICYMI, Weekly Tariff Highlights

Whether it’s a minor tweak or a major shift, we’ll keep you posted on the latest tariff changes—so you’re always in the know.

• Is The U.S.-China Trade War De-escalating?
  • Last week, Trump said he was willing to de-escalate the trade war by reducing tariffs on China, sending the market soaring.
  • However, China quickly clarified that no talks have taken place and fired back that the U.S. must remove all “unilateral tariff measures.”
• 12 States Sue Trump Administration
  • Twelve U.S. states claim President Trump violated the Constitution by using emergency powers to impose global tariffs and harming local economies.
• Recession Is Coming in 2025?
  • Financial experts warn that a recession will happen if tariffs remain where they are currently.
• DHL Temporarily Suspends U.S. Shipments Over $800
  • The delivery service suspended shipments of over $800 to U.S. customers due to U.S. customs regulatory changes.
• Temu’s Ad Spend Reaches Zero
  • The Chinese ecommerce giant has pulled online ad spend along with other retailers like Shein, which resulted in a $7 billion loss in ad revenue for Meta.

🎧 How Klaviyo’s CPO Thinks DTC Brands Should Build Customer Relationships in 2025

In this episode of the DTC Podcast, we sit down with Adil Wali, Chief Product Officer at Klaviyo, to break down the future of consumer marketing and why Klaviyo is launching a new category: B2C CRM.

He explains how Klaviyo’s transformation into a unifying B2C CRM platform empowers DTC brands to deliver personalized experiences at scale by unifying marketing, service, and analytics.

We talk about why repeat customers are more important than ever and dive deep into how marketers can drive loyalty without relying on constant discounting.

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What you'll learn in this episode:

• The Importance of Unified Customer Data: How to integrate data across functions to create a holistic view of the customer.
• Klaviyo’s Customer Hub: How this new self-service feature allows customers to manage orders, subscriptions, and receive personalized recommendations.
• AI-Powered Insights: Leveraging analytics for actionable, real-time insights so brands can make decisions quickly.
• Capitalizing on Loyalty Programs: Recognizing the underutilized potential of customer loyalty initiatives without eroding margins. ​
• Real World Success: Learn how brands like Dollar Shave Club and Happy Wax have achieved measurable improvements in customer engagement and churn reduction.

👉 Listen to the full episode with Adil here.

🌐 IN THE SOCIAL SPHERE

Online users last week noticed that OpenAI has quietly added new code to ChatGPT.

The code suggests that OpenAI will soon partner with Shopify to let users shop directly inside the chat interface.

What this means: sellers will no longer need an external website and can reach buyers through AI search.

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💸 MERGERS & ACQUISITIONS

• Developer platform Supabase raises $200 million in funding at a $2 billion valuation.
• Cloud monitoring and security platform Datadog acquires AI-powered data observability startup Metaplane.
• Fintech company Froda secures $22.7 million to offer debt financing for small businesses.

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⚡ QUICK HITS

📲 Your best customers already follow you online. Learn how to transform them from followers to email and SMS subscribers with Klaviyo’s new guide: “3 ways to grow your list on social media.” Grab your copy here.*

❓ Answer: Sam Altman, CEO of OpenAI, shares that 10% of the world now uses ChatGPT. (Source: Forbes)

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📅 EVENTS

Data Innovation Summit -  The two-day hybrid event (in-person and online) brings together innovative minds from across the Nordics and beyond, including enterprise practitioners, technology providers, and academics.

🗓️ May 7-8, 📍 Kista, Sweden 💰 €249 - €499

World Retail Congress - The Congress offers a unique opportunity to network with peers from leading retail brands and to hear from renowned speakers and industry experts who share insights and best practices.

🗓️ May 12-14, 📍 London, UK 💰 Register To Attend

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📰 NEWS

• Amazon sellers are raising prices due to Trump’s tariffs on China.
• YouTube’s ad revenue reached $8.9 billion in Q1, up 10.3% YoY.
• Dove partners with Chamberlain Coffee on plant-based milk bodycare collection.

‍📥 Got a B2B Biz?

Join dozens of B2B companies finding demand-gen success through our niche community of 150k brand leaders and founders this year. Talk to our team to learn more.

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Have you heard our latest podcasts?

• 💡 TWBERP 30: GlockApps on Opens, Clicks and Privacy Myths
• 🍫 How Mid-Day Squares Scaled to $36M with Costco and More
• 💰AKNF 500: Don’t Overspend on Amazon and Kill Organic Results
• 📈 TWBERP 29: Connect Email and Meta to Scale Growth (Part 2)
• 💰 TWBERP 28: Use Automation to Improve Spend Effciency (Part 1)
• ☕ How Four Sigmatic Is Navigating Tariffs Without Losing Customers

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Don’t forget to rate the DTC Podcast on Apple (⭐️⭐️⭐️⭐️⭐️)

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

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