- In The Snow Newsletter | by Jonathan Snow
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- Q1 Hangover: Tariffs, Inflation, Rising CPMs, Global Trade War, Consumer Sentiment (Week 34)
Q1 Hangover: Tariffs, Inflation, Rising CPMs, Global Trade War, Consumer Sentiment (Week 34)
Brands, Consumers, Countries, Ad Platforms... All on Shaky Ground!

Q1 2025 is starting to feel like Q1 2022
Before we dig into the doom & gloom of 2025’s rough start, some positive news:

I made it out to SF last week to speak on a panel at KeyBank’s Emerging Tech Summit and carved out time to visit AppLovin’s Palo Alto office. Upon review: I can confirm there are no Russian spies, Chinese spies, click farms, or other risky business at play here.
Actually- for a company that eclipsed a market cap of $100B+, I was pleasantly surprised to see it resemble a startup more than a cushy big tech co. They’re surely an enigma and one of the more fun topics to cover in the past year.
Now, back to regular programming:
2020-2021 felt like the glory days, everything working in brands’ favor.
Then Q1 2022 hit where inflation surged and the Fed had to start hiking rates aggressively. This cascaded into a weaker consumer, weaker economy, and the death and destruction of countless consumer brands.
Fast forward to Q4 2024 where the industry came off a record-setting quarter. AI jolted the economy & overall excitement. Brands started returning to “growth days” and the consumer got a lot more confident & spent like a drunk sailor. Was the record quarter most likely due to extended holiday sales that nearly spanned the entire quarter? Did we pull forward all the revenue? Good chance.
Now? Just one quarter later… Ecommerce is stuck in a vicious cycle.

Q1 forecast for GDP growth just plummeted to -2.8%. This correlates to economic health. Negative = bad. This is the worst estimate I can remember in a long time.
Inflation & tariff pressure is increasing COGS ➡️ Brands increasing prices & optimizing for higher AOV ➡️ Weakening consumer not wanting to spend (especially not on price-hiked products) ➡️ Brands are still spending so CPMs are still skyrocketing ➡️ Performance declining.
What gives?
Really all starts with inflation.
Inflation = rate hikes, higher COGS, higher prices for consumers, uncertain stock market, consumer confidence in free-fall.
The silver lining is that the American economy is the most resilient and the world and it WILL bounce back. Patience is a virtue.
What I'm Covering Today:

1. Shopify Audiences is Understated: Don’t Forget to Use THIS One

Friendly reminder to NOT forget about this Shopify Audience: Retargeting Boost
The equivalent pixel audience would be:
90D website visitors excluding 90D purchasers
By simply adding this audience to a 90D Website Visitor retargeting audience, we got 2x the match rate & doubled the size of that exact retargeting audience.
If you wanted to exclude existing customers from this retargeting audience, that is possible. Just exclude the Shopify Audience "Existing Customers" audience at the ad set level.
I also recommend you use this "Retargeting Boost" audience in your "engaged audience" segment in Meta's advertising settings.
The better match rates you achieve, the better things will be for you in the account.
If this is all a foreign science to you, Avenue Z can help optimize your paid media, data, and audience segmentation. Reach out to us here.
2. Inflation is Hitting Product Prices & Performance 📉


Q1 is OFFICIALLY our hangover from Q4. It seems like we pulled forward a lot of revenue.
Maybe b/c brands discounted products for so long & excited the consumer?
According to Particl's product price inflation data, February showed:
Health & Beauty: +16% YoY
Apparel: +12% YoY
This is a BIG hike. In 2 of the most popular consumer categories.
This also what I'm seeing on brands. Higher AOVs, higher CPMs, lower performance.
Brands and consumers are at odds. Inflation & tariff pressure cause product prices to go nowhere but UP.
In the wake of rising ad costs, brands really have no choice.
Tracking the economy and understanding consumer psychology is paramount.
Brands need to understand how they're positioned in the category and tackle it head on.
You can track price fluctuations for each product category w/ Particl's free tool here:
3. Investors in the Publicly Traded Advertising/DTC Tech Companies are Thinking About THESE THINGS

Last week I participated in KeyBank's Emerging Tech Summit in SF. Spoke on a panel and spent the rest of the day meeting with institutional investors in $SHOP, $META, $GOOGL, $APP, TikTok, $KVYO, $AMZN, $SNAP, $PINS, $RDDT, & more.
I had a full day of meetings, here’s what’s top of mind for them:
Media Mix: any big shift YoY?
Largely the same for performance dollars in the ecommerce vertical. Budgets in order of highest to lowest are as follows: Meta, Google, TikTok/AppLovin, Snapchat, Reddit, Pinterest. The YoY gainers IMO will be AppLovin & Snapchat in a growing pie. I don’t see budgets being pulled from Meta or Google to test on either of these channels. When performance is there for brands, the budgets don’t shrink.
The rise of AppLovin
Don’t have to dig too deep here, I’ve been vocal enough about the platform. Feel free to refer back to previous newsletters or tweets of mine! Still seeing strong performance, not even close to the level of Meta scale yet, but gradually working our way up and devising internal best practices before opening the real spigot.
State & sentiment of TikTok's future
TikTok is here to stay. Pretty sure this is the common sentiment now. Remember when we saw it appear in headlines daily a few months back? Pretty sure my original prediction is still the most likely outcome. TikTok will NOT change as we know it. Whether it’s a new owner, new policy/regulations, etc - - - TikTok will likely be here to stay (in the same capacity that we’ve experienced).
YouTube/Google: any traction w/ Shorts?
YouTube probably has THE most potential of any ad placement out there. But their lack of urgency & innovation over the years has been extremely painful. As such, they have had 0 traction with monetizing shorts via social commerce or ad units. For whatever reason, you STILL can not buy Shorts-only placements in demand gen. Enough said.
Shopify: updates on Audiences & Shop campaigns
Shopify Audiences and Shop campaigns are the two most underutilized Shopify products by merchants. In fact, they’re easily the two best marketing/ad products Shopify even has.
I’ll leave it at this: Shopify Audience is our top spending account’s top spending ad set. Shop campaigns take 2 min to set up with no creative needs & is driving more efficient new customer acquisition than any TOF channel (just not close to the level of scale as paid social). Use these tools!
Snap, Reddit, Pinterest: anything new or exciting?
Reddit & Pinterest: No.
Snapchat: Yes. now that Snap has click-only purchase optimization, it actually has a chance to perform! Snap is also now offering $10k ad credits (no risk) & 25% rebate on all spend for the first quarter for brands just to test the channel again. They’re putting money where their mouth is. This speaks volumes and could be a breakthrough for them.
Impact of tariffs on ecommerce & performance
Definitely an impact. Brands are raising prices, consumers are spending less, and brands are left with degraded performance.
AI advancements in creative
Icon is the most attractive AI creative company I’ve seen. It’s already better than the creative AI you’ll see natively available on Meta, Google, etc. This is a company to watch. They went from $0 to $5m in ARR in 30 days from launch. Where there’s smoke, there’s fire. We’ve been testing it internally at the agency and honestly floored by how close they are to making this an essential tool in the stack for turning creative strategists into full blown end-to-end strategists + designers.

The market is “crashing,” should I sell my stock portfolio?!
Been getting this question consistently for the past few weeks so just going to lay it out here.
The short answer is NO.
If you’re losing sleep at night over a 10% market correction, chances are you’re just not invested properly. If you have a meaningful amount of money in single names that you wouldn’t go to the grave with, you’re in a bad spot.
Minimize single name stocks and maximize your position in index funds to achieve diverse allocation among the best companies in the world. S&P 500 index funds are a safe bet that you can expect 8-10% annual gains over time (blended). Always have a cash (money market) position when interest rates are elevated so you get fixed income, but also a chance to rotate out of when the market draws down and you can quickly flip that cash into the index at solid entry points. You should have a portfolio that allows you to sleep good at night even in bear markets.
Stay safe out there.

What I’m Listening to 🎧
Beats of the Week: AVO x JOE & THE JUICE
AVO is one of my top up & comers in the house scene. He’s on Francis Mercier’s Deep Root record label. Listen to the mix below & thank me later.
I welcome all feedback. Good, bad, everything in between.
Hit reply, and let’s hear it! 👂
📧 Share your thoughts or what you want me to cover next!
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