DTC962: Brand Spend Shrinks, Growth Metrics, and December Gifting Angles

Good morning,

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

• 💰 Before You Cut Ad Budgets…Read This
• 🚀 Growth Metrics Every 7 Figure Brand Needs To Track
• 🎁 6 December Gifting Angles To Test Right Now

You’re reading this newsletter along with new subscribers from: DASH Water, Sunrise Ski, and Lithios. 👋

‍🚨 AI-Native Retail Has Arrived… And 2026 Will Be the Breakpoint Year

The retail landscape is undergoing its biggest transformation in decades.

Discovery, checkout, pricing, and returns are rapidly shifting from manual workflows to AI-driven, agentic systems. 🤖

Meanwhile, tariffs, global complexity, tougher return economics, and shifting consumer behavior are reinventing the backbone of commerce. 🫨

Overwhelmed? No need. 😌

⚡ Swap’s 2026 Commerce Report breaks down how brands can stay visible and profitable, and why unified, AI-powered infrastructure will define the next era of retail.

Swap’s report reveals:

• 👉 Where AI needs to be working for you to stay competitive
• 👉 Which segments are growing fastest
• 👉 How to leverage your data to avoid margin erosion
• 👉 Why agentic commerce is about to dominate and how to prepare

And more…

If you’re planning to grow in 2026, this is required reading. 📈

‍💰 When Brand Spend Shrinks, What Breaks First?

Cutting brand spend in Google Ads sounds like the easiest efficiency play.

Cleaner budgets. Less overlap.

On paper, it’s a simple lever to pull.

But the first thing that usually improves is budget savings, and the first thing that breaks is… everything else.

Pilothouse warns brands every Q4: when you pull back branded search and Performance Max too aggressively, you don’t just reduce spend… You remove the signals that hold your entire account together.

Here’s what actually happens:

• Smart Bidding loses its bearings

Branded clicks teach Google what a real buyer looks like. When brand volume drops, those signals fade and bid models destabilize.

• Non-brand campaigns get more expensive

Spend rises, conversion rates fall, and acquisition costs drift upward because Google has less clarity on user intent.

• Upper-funnel channels suddenly “underperform”

YouTube and prospecting aren’t failing. They’ve simply lost the branded catch-net that once converted warm traffic at the bottom.

• Competitors move in immediately

Lower impression share on brand terms invites conquesting. CPCs jump as rivals buy traffic you previously captured for pennies.

Pilothouse has seen this pattern repeatedly: when brand spend dips, non-brand performance can fall 10–25% within two weeks.

The cause isn’t mysterious. It’s mechanical. Brand is the recall engine that keeps Smart Bidding calibrated across Search, Performance Max, and YouTube.

The good news? You can adjust brand spend without blowing up performance if you do it intentionally.

Here’s what Pilothouse recommends:

• Reduce spend gradually, not overnight: Sharp cuts shock machine-learning systems.
• Add competitor negatives and CPC caps before cutting: Prevent opportunistic bidding wars.
• Feed Smart Bidding new intent signals: CRM lists, remarketing pools, and high-value conversion events help stabilize learning.

But the bigger principle holds:

Brand campaigns are the memory layer of your account.

They remind Google who buys, how they search, and what a profitable user looks like.

Remove that and you force the system to perform without the very signals that trained it.

The takeaway?

If you need to reduce brand spend in Q4, do it like a controlled operation: slow adjustments, protected keywords, and fresh intent signals.

It’s the only way to stay efficient without sacrificing the downstream performance that drives your overall CAC into 2026.

‍☕ Lavazza Partnership With Walmart Marketplace & WFS Brews Rapid Growth

📈 Lavazza, a coffee brand, saw more than 200% growth in Walmart Marketplace sales within 18 months of leveraging Walmart Fulfillment Services (WFS).*  

*Data provided by Lavazza.  

Since joining WFS, Lavazza has:

• 😎 Improved efficiency
• 📦 Improved on-time delivery to customers
• 💵 Reinvested in marketing and advertising

💪 Let WFS do the heavy lifting while you focus on scaling your way.

‍🛠️ Google Search Console Rolls Out Data on Social Channels

Google is expanding Google Search Console's Insights report to include search performance data about social channels like YouTube.

This page will include metrics on content performance and top search queries that lead users to your social profiles.

Right now, this is a limited rollout, so keep an eye on your GSC account for updates!

Learn more here.

‍🎧 Growth Metrics Every 7-Figure Brand Needs To Track

Our good friend Sarah Carusona returns to the DTC Podcast for a long-awaited catch-up and to discuss common growth mistakes.

We dive into what it’s like running BA Commerce, how her team drives growth, and how she found her first client at a DTC event!

What you’ll learn:

• Why fractional CMOs often fall short and what brands really need instead
• How to add a trained operator who owns growth from top to bottom
• The key metrics Sarah watches before changing spend
• Why most influencer budgets are broken and what happens when you tie performance goals to compensation

▶️ Watch the full episode on YouTube here.

🎧 Or click here to listen on Spotify.

DTC brand owner James Lee shares that December is still a major revenue month, often more efficient than November, and gifting-focused messaging is what drives the lift.

Lean into creative angles that speak directly to holiday shoppers: clear delivery deadlines, stocking-stuffer framing, price-tiered gift guides, and reminders that offers are ending soon.

These messages reduce uncertainty, simplify decisions, and keep momentum high all the way to Christmas.

‍🤔 Need TikTok Shop Affiliates or UGC Creators to drive your sales? Tap into JoinBrands' network of 500k creators ready to go. No subscriptions required, no chasing creators, just instant content and sales at scale. Try it for free here. *

‍📥 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.

Have you heard our latest podcasts?

• 🔥 AKNF 565: BFCM + Meta in 2025: Scrappy Pivots That Crushed
• 🏆 Ad-venturous 31: Post-BFCM Steps That Matter
• ✅ TWBERP 62: Where Should That Click Go? Landing Pages etc.
• 📈 Nik Sharma on Scaling DTC in 2025: Creative Strategy + Offers
• 💡 AKNF 563: 3 Moves to Win Black Friday While It’s Happening
• 💸 Ad-venturous 30: Squeeze The Rag Dry Black Friday Weekend

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

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.