What 20 AppLovin Incrementality Tests Mean for BFCM

[00:00:00] Tony: Okay. Let me, let me put this in Tony simple terms. Mm-hmm. So new customer new customer patterns throughout the Black Friday/Cyber Monday period, flatline and then sort of like a growth, like an acceleration of new customer as like a, as a rate leading right up to the end of the shipping cutoff.

[00:00:17] Am I saying that correctly?

[00:00:18] Steve: Yeah, somewhat. I mean, that's to-- not to say that Black Friday and Cyber Monday didn't have new customer growth, but it was stronger relative to the previous years-

[00:00:26] Tony: I see ...

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[00:01:10] Tony: Hey, y'all, Tony Chop here VP Paid Media at Common Thread Collective back with Steve, two days in a row. Steve, how are you, brother? I'm doing great.

[00:01:18] Steve: Being able to get to hang out with you and everyone else in the office and talk about all sorts of things.

[00:01:22] Tony: I love when you're in town. We get we get to jam.

[00:01:24] We- stuff happens so fast. The only thing I don't love what's up with this-- what's up with these mosquitoes, brother?

[00:01:30] Steve: This is weird. Yeah. I, I don't know whether it's the coastal flooding in California or the rain or something.

[00:01:36] Tony: Okay. Yeah. We have like a-- there's like a weird mosquito thing going on in our office.

[00:01:40] Like, if you could see in our office right now, you'd see a room full of people going like this everywhere. We're not crazy, I promise you. Hope-

[00:01:47] Steve: Yeah ...

[00:01:47] Tony: hopefully we'll get this sorted,

[00:01:48] Steve: but. Well, trying to swat down those iOS 27s.

[00:01:50] Tony: Oh, smack.

[00:01:52] Steve: Yeah.

[00:01:52] Tony: Slap them down. Well, very good. So, here we are again. We got a couple things we wanna talk about today.

[00:01:57] Some BFCM. I know you brought some BFCM data that I think is gonna be some interesting things to tangle into. And then I just wanna have some back and forth on AppLovin and really specifically what we're-- kinda what we're anticipating for AppLovin coming into the into the last, the home stretch of this year here.

[00:02:13] And just kinda talk about like where we're where we're seeing opportunity and where we want, where we wanna see things go for our clients for the for this, these last couple weeks. Sound good to you?

[00:02:20] Steve: That sounds great.

[00:02:21] Tony: Very good. All right. Well, let's start with the BFCM stuff. So, you were pulling some data earlier today and that I thought was pretty interesting.

[00:02:27] Ta-talk me through it. What are we looking at here?

[00:02:29] Steve: Yeah. So I started looking at total revenue for all the different years coming up for November and December. And what we were seeing, what I'm really seeing is 2025 wound up having revenue kind of surge later than in previous years. That is particularly on new customers.

[00:02:48] Okay. So we saw kind of a holdout and then right around the shipping threshold I would say the, the 15th, it was around this timeframe where we saw significant growth. It was you know, from the 10th onward, maybe up until the 20th.

[00:03:03] Tony: Okay. Let me, let me put this in Tony simple terms. Mm-hmm. So new customer new customer patterns throughout the Black Friday/Cyber Monday period, flatline and then sort of like a growth, like an acceleration of new customer as like a, as a rate leading right up to the end of the shipping cutoff.

[00:03:20] Am I saying that correctly?

[00:03:22] Steve: Yeah, somewhat. I mean, that's to-- not to say that Black Friday and Cyber Monday didn't have new customer growth, but it was stronger relative to the previous years-

[00:03:30] Tony: I see ...

[00:03:30] Steve: as you get closer to the shipping cutoff. I see. I see. I see. Yeah, we saw-- We, we had growth over Black Friday- So we're not

[00:03:34] Tony: talking about absolute numbers.

[00:03:35] We're talking about growth rate.

[00:03:36] Steve: Percent growth. Understood. Yeah. Percent growth as we got to the shipping cutoff was actually the largest, like somewhere upper. Heck, some of them were close to 40% as you got close to that shipping cutoff. Copy. And that is, that's very substantial. I know they're not the biggest days, but they all of a sudden that kind of period gained a lot more interest last year.

[00:03:58] And part of me thought it was because of the K-shaped economy, that you have a lot of people that were holding off, a lot of people that were waiting for that second paycheck in December. Sure. The December 15th one, if you're on a bimonthly to kind of actually make some of their purchases.

[00:04:14] Tony: Sure. Yeah, I mean, everybody's got different buying behaviors.

[00:04:16] I can think about my own anecdotally. I always think about my, my dad. I don't know if I should say this publicly. My, my dad. Dad, I hope you're not listening. My dad was a Christmas Eve shopper.

[00:04:26] Steve: Mm-hmm.

[00:04:26] Tony: Always my entire life. I remember him, I remember him going out like Christmas Eve and kinda having a little bit of a sort of a panic look on his face.

[00:04:33] Yeah. Anyway I, I, I personally, anecdotally as it, as it stands, am also like a delayed shopper and I am I, I am making a lot of my purchases on the, I guess maybe the simplest way to understand sort of purchasing behavior, I'll make purchases on Black Friday. Sometimes I'll delay on Cyber Monday because of my job.

[00:04:51] I sort of often know that the deals are biggest on Cyber Monday. And then I'm gonna have a batch of purchases as well that are like approaching that shipping cutoff date. Probably just a personal thing. So I think you had another piece of data that I thought was interesting and sort of resonated with me as like a shopper, which is the, the shape of new versus returning customers leading up to Black Friday, Cyber Monday.

[00:05:13] So t-take me through that.

[00:05:14] Steve: That's right. So what I was seeing in particular is that you saw stronger growth in... So a lot of people get in this narrative in their head that discounts are happening earlier and earlier, right?

[00:05:24] Tony: Mm.

[00:05:25] Steve: That people are buying earlier, you gotta get in front of it.

[00:05:27] Tony: Mm.

[00:05:27] Steve: And that's kinda not what you see when you look at the data.

[00:05:30] The growth early though, if you split off new and returning, there's greater growth in returning customer revenue prior to Black Friday and Cyber Monday. I see. So if you know I'm going to offer or this is the discount I would get from this brand- Yeah ... from let's say Born Primitive. I love this brand and I know I'm gonna buy them for like my loved ones for the holidays and they have a discount on Veterans Day, November 11th.

[00:05:56] They do. I'm gonna convert. I'm gonna go ahead and buy that now if I know that discount is gonna be as good as their Black Friday and Cyber Mon-Monday. I get ahead of that. So returning customers tend to... They know your brand, they love your brand. You can sell to them early

[00:06:11] Tony: Yeah, great. I mean, this makes perf- perfectly good sense to me as far as like how, how the sort of shape of the purchasing behavior happens.

[00:06:18] And I think it's a case in point for a, a heavy up on your forecast early in the month in November from your returning customer cohort, and specifically from your own channels on email and SMS and putting, putting a good amount of weight in that first half of the month on your, on your own channels.

[00:06:33] And also I think there's like a little bit of a connection to my world in, in the paid media side and the new customer acquisition side because right now at this particular moment in time, what's the date today? October 22nd we are entering the sort of the, the darkest, the darkest days of paid media.

[00:06:49] Yeah. This is when we start to see, we start to see the competition in the marketplace increase. It really starts to begin to happen in the sort of tail end of October. We start to see more pressure in the auctions and typically that manifests as higher CPMs and and often October is like a real struggle month for paid media.

[00:07:06] What, what I can tell you, like what my experience is, is lots of client conversations where we're doing things like saying like, "We, we need to hold the line. We need to keep the media pressure up. We need to keep the brand out in front of the eyeballs right now-" Mm-hmm ... so that we can fill the sponge, so to speak and, and there...

[00:07:22] And then again squeeze the sponge as we go into this holiday period. And I think what, what I'm hearing you say is a good time to squeeze the sponge, a good time to think about squeezing the sponge and how you think about in your forecasting is the first couple weeks of November. Does that sound right to you?

[00:07:35] Steve: Yeah. And I would say even up until Black Friday, like you have the opportunity to squeeze out new n- returning customer revenue prior to them getting hit with a bunch of discounts.

[00:07:45] Tony: That's right.

[00:07:45] Steve: Like pull your-- be willing to pull your returning customer revenue forward a little bit- I like it ... even if it's a few days.

[00:07:50] Tony: Share a wallet. Grab it.

[00:07:51] Steve: Yeah. Absolutely. Grab that, grab them early.

[00:07:55] Tony: Yeah.

[00:07:55] Steve: But I wouldn't count on new customer revenue being able to convert on early discounts. They're holding out, they're waiting. Sorry, they're comparing you to every other option out there.

[00:08:04] Tony: I am.

[00:08:05] Steve: Yeah, I do that as well. I'm like, I know I'm gonna get gr- better deals on Black Friday.

[00:08:10] Like if I have time to shop actually on that day- Yeah ... like I'm gonna find better deals than maybe between the different brands I'm considering.

[00:08:17] Tony: Yeah. I think, I think if I could put this in like my own language too, it's like the better deals, the deals are def- definitely es- they ef- escalate, Yeah

[00:08:25] all the way up until Cyber Monday. I think the trade-off is like availability and sort of, you know, a- anything that's limited in quantity and I think that kinda plays to like getting those offers out to your existing customers- Right ... and why, why that cohort of customers moves earlier. So cool. This all makes sense.

[00:08:39] So, so speaking of, Shared wallet. Let's switch gears. Let's talk about Applovin for a little bit here.

[00:08:44] Steve: Yeah.

[00:08:44] Tony: I think a couple things are, are coming to mind for me with Applovin that I'm that are like salient ideas that I wanna express into the conversation. So, number one, the, the thing that popped out last Black Friday and Cyber Monday was Applovin turned out to be our third highest spending media channel out of, out of all of them, which was like, whoa, like really surprising.

[00:09:02] Mm-hmm. So obviously Meta and Google represent n- 90% of the media investment across our portfolio. Our portfolio is about a, about a billion and a half dollars across 200 some e-commerce brands. So pretty good scope. Meta and Google, 90% of that. To give some shape to the thing, so our Meta investment's growing about 30% year on year.

[00:09:19] Google investment's growing 20% year on year. Mm-hmm. The Applovin investment is up like five times year on year. It's the fastest- Yes ... growing media channel that we have. TikTok, Snapchat, Pinterest, those are all growing like growing orders of magnitude two X. But so, What the thing that I wanted to kind of double-click on with you in this and I know you have some, some spend data too, but the other thing that's been interesting to me is you and I have been talking about our portfolio of incrementality tests.

[00:09:43] It's also true that AppLovin represents the, the most incrementality tests that we have outside of Meta and Google, therefore, the most confidence. So my prediction here, you heard it here first, is I don't think this is any surprise news for anyone because we- we've spent this entire year like really activating our clients into AppLovin and really act- really securing our measurement.

[00:10:04] I think AppLovin's gonna be a real breakout in Black Friday, Cyber Monday this year. What, what do you think, Steve?

[00:10:09] Steve: Yeah, I, obviously I think it's gonna continue on the kind of trajectory we've seen where it has taken up a good amount of our spend.

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[00:10:56] Tony: Mm.

[00:10:56] Steve: It's come back with great incrementality results.

[00:10:58] Tony: Yep.

[00:10:58] Steve: We've had, I think, one or two tests out of the 20 we've run below 100%. Right. Everything else has been with an average of around 150%.

[00:11:07] Tony: Yeah.

[00:11:07] Steve: For- Pretty tight

[00:11:08] Tony: range too, right?

[00:11:09] Steve: Tight range. They've been-- like all the brands that have used it have been solid with it. Yeah. So, I think it real- is really good at converting.

[00:11:16] So yeah, I expect to have a really solid year for us on Black Friday and Cyber Monday.

[00:11:20] Tony: Great. Now, what-- Now you have some charts here. Is there any any real data, salient data points that that, that you'd like to bring up?

[00:11:26] Steve: Well, I mean, I think you kinda touched on it. That'd be 5X. Sorry, stole

[00:11:29] Tony: your point.

[00:11:29] Steve: You did. They 5X'd basically year over year, year to date.

[00:11:33] Tony: Yeah.

[00:11:34] Steve: The first half of the year was even more. It was like 15X.

[00:11:36] Tony: Yeah.

[00:11:36] Steve: Because we were a little bit light in 2025 in the first half of the year.

[00:11:40] Tony: Yeah.

[00:11:41] Steve: In AppLovin, we had some couple tests come back that were absolutely astounding.

[00:11:45] Tony: Yeah.

[00:11:45] Steve: Like 200% incrementality.

[00:11:47] Tony: Yeah.

[00:11:47] Steve: A scale test then that came back at 150%.

[00:11:50] Tony: Yeah.

[00:11:50] Steve: So that wound up leading to us cranking on a lot more brands testing as we were going into them. Yeah. So it gave us confidence that, hey, we can push on this channel, and the numbers we get from it are legitimate.

[00:12:01] Tony: Yeah. Yeah. Yeah, I have so, I have so much so many sort of interesting things, interesting thoughts about the AppLovin platform.

[00:12:08] I, I think if I compare it to some of the incrementality testing that we're doing and exploring across the other channels, like, so when I say the other channels, I mean everything other than Meta and Google, right? Mm. So, I think one of the challenges that we face with the other channels is there's a, there's a much wider band of tactics that you can deploy in a channel.

[00:12:28] So just think about like different attribution settings or different bidding or different audience. Mosquito. I got it. That's four. That's four today. My goal, my KPI is only one a day. I'm at four. I'm in, I'm in Black Friday- Gotcha ... Cyber Monday mode right now. Anyway, where was I? Yeah, so the-- so, The media platforms have a pretty wide range of tactics that you can, that you can use that introduce variability really- Mm-hmm

[00:12:58] in like, the all sorts of things. Variability in the delivery, variability in the optimization goal, in the mechanism, in the measurement, sort of like this really wide range. The thing about the AppLovin platform that I've always thought was so fascinating is how little of that optionality exists in the platform.

[00:13:15] For example, in the, in the early days, I remember last year, there was only cost per purchase optimization. That was it. Mm. And since then, they've introduced ROAS, ROAS bidding. Mm-hmm. So now there's two. And there was only zero-day click attribution. Yeah. And since then, they've introduced seven-day click at- attribution as, as an option.

[00:13:37] And I heard-- I've, I've actually seen some view-through attribution reporting in the platform, not as an optimization goal, but just as something to look at. I'm like, "No."

[00:13:46] Steve: No. Hopefully they don't go down

[00:13:47] Tony: that road. No. Don't do it. Anyway, the point being is like the-- here's the full circle. The AppLovin platform started as a really tight, really sharp performance engine- Mm

[00:13:58] that was like un-- kind of unscruppable. Like you couldn't give it a bunch of settings that were like, quote-unquote, "wrong," or maybe, maybe the right way to say it would be low incrementality. Therefore-

[00:14:09] Steve: Mm-hmm ...

[00:14:09] Tony: we ran a bunch of media, we ran a bunch of tests. Not, not only did we get positive incrementality, like 1, 1.5 on average across the, across the test, but the range, the band was really tight.

[00:14:21] Steve: Yeah.

[00:14:22] Tony: And that-- Comparing that to some of our other platforms where the tactics can be really different, we do the eye test, they come back in a much wider range. What I, what, what I feel with AppLovin is a larger degree of organizational confidence in deploying the investment and having, you know, for, for my two cents from like, a- as the person who oversees, helps oversee the media investment, I'm always in this, in this spot where I'm like either really helping to create contribution margin or potentially making CM go down, which I don't like.

[00:14:57] So the, the point being is like the more confidence there is in the measurement, the more media gets deployed. And at this point in time, on October 22nd, we are orders of magnitude more confident in the measurement on AppLovin than we, than we were a year ago. And even absent that confidence, we deployed a bunch of media on AppLovin and BFCM last year.

[00:15:16] All that to say, I think it's gonna be a big year for App.

[00:15:19] Steve: It'll be a good year for App. Yeah.

[00:15:21] Tony: Yeah. My, my whole thing has been like sort of like chan- like I've been really carrying this flag myself and a few others like Kana over here at CTC. I'm sure, you know, y'all-- a lot of y'all have crossed paths with him.

[00:15:33] Like, we've really been carrying this flag, like, throughout our portfolio to get, get our clients ready because we-- I believe personally that this work is really gonna pay off here over these course of the next couple weeks. Especially the things, kinda some of the things that are unique about App, like the amount of delivery that we can get out of it is kind of like the only thing I've ever seen that's sort of meta-like.

[00:15:52] Mm-hmm. What else? What else is new? Oh, this is another thing that's pretty cool. So you I'm sure you've heard me sort of rant about my, my push to build sort of our, our architecture to route- Right ... ads from the ad log into the ad platforms through the API. So we published probably 20,000 ads on Meta last month over over this-- through this pathway.

[00:16:14] We got the TikTok connection wired in six weeks ago, and right now I am currently pushing ads with a select number of partners and members of the team into AppLovin. So, like the stars are aligning, right? We got really good measurement. We got we've activated a bunch of our clients. We have the pipelining for the creative for AppLovin.

[00:16:34] We are ready to go.

[00:16:37] Steve: Right. And having push to build's gonna make it a lot easier to put out ads.

[00:16:40] Tony: Yeah.

[00:16:41] Steve: And spend more money on AppLovin now.

[00:16:43] Tony: Yeah. Ultimately-

[00:16:44] Steve: More profitable spend.

[00:16:44] Tony: Yeah. Ultimately get more delivery. I mean, I think we're seeing, we're seeing the same thing on app as we see in, in Meta- Mm-hmm

[00:16:51] as we see everywhere else where these, these algorithmically driven, performance optimized media platforms are are hungry for creative volume.

[00:17:01] Steve: Yeah.

[00:17:01] Tony: So we-we're continuing to build the sort of infrastructure, the rails to support that. So yeah. Cool stuff. What else? What else is on your mind?

[00:17:09] Steve: Well, I think we skipped over something that actually occurs prior to Black Friday and Cyber Monday.

[00:17:14] Tony: Thanksgiving?

[00:17:15] Steve: Well, yes, Thanksgiving of course, but this is midterm election year.

[00:17:18] Tony: Ah, yes.

[00:17:19] Steve: So this is actually something that will probably be hurting performance.

[00:17:24] Tony: Mm-hmm.

[00:17:24] Steve: The-- Another thing that doesn't particularly help October.

[00:17:26] Tony: CPM pressure.

[00:17:27] Steve: Yep. Yeah. Those impressions are gonna get soaked up by political campaigns.

[00:17:32] Hmm. So it's gonna be harder to get some of your ads through.

[00:17:35] Tony: Interesting.

[00:17:36] Steve: Yeah.

[00:17:36] Tony: I'm assuming something coming out in in the data newsletter about that,

[00:17:40] Steve: Yeah. We'll, we'll touch on that next week because it's gonna be affecting probably the next couple weeks.

[00:17:44] Tony: Great.

[00:17:45] Steve: The-

[00:17:46] Tony: Never a dull moment.

[00:17:47] Steve: The caveat with that is you normally kind of see by the end of that election week, you normally see kind of revenue rebound. Like everyone's finally done- Oh my God ... having to think about all sorts of potential things they have to vote on.

[00:18:00] Tony: Yeah.

[00:18:00] Steve: And, and their local and state elections as well.

[00:18:02] Like there's different- Yeah ... ballot measures and, and amendments that like every state's considering, I'm

[00:18:07] Tony: sure. Oh, the amount of spam texts I'm getting right now is- Right ... abhorrent.

[00:18:11] Steve: Yeah.

[00:18:11] Tony: Yeah. Right. Well, so listen, listen everyone, these are the toughest days in e-commerce right now. I think hon-honestly, today, October 22nd, through right up through the election- Yep

[00:18:21] Cycle, and we have that, we have that cycle every, every two years approximately. The-these are the most challenging times so my advice to anyone listening is stay strong out there. We are we are continuing to keep the focus on profitable delivery. We have a mindful eye to making sure that we're also maintaining our reach, our exposure, our media pressure- Mm-hmm

[00:18:42] um, so that we are filling the sponge ultimately to squeeze the sponge here over the next next couple weeks. And listen, it's not too late. If you haven't gotten going on App Eleven, this is a, this is the bet to make right now before before this Black Friday. And I-- you're not gonna be disappointed.

[00:19:01] We're having we're having a lot of, we're having a lot of success with the platform, and and I'm stoked on it.

[00:19:06] Steve: Yeah.

[00:19:06] Tony: Any closing thoughts?

[00:19:08] Steve: Yeah. I mean, I would consider when election season does end- Yeah ... be ready to ramp up. You might be struggling through that time period, but I think as soon as that ends be ready to go.

[00:19:18] And also be ready for that shipping cutoff. I think after Black Friday and Cyber Monday, there's, there's probably a good cohort of customers that are willing to purchase late and barely- Like my, like my

[00:19:29] Tony: dad.

[00:19:30] Steve: Oh, like me. Sorry, family, for all the late Christmas gifts.

[00:19:36] Tony: All right. Well, that's it. Well, Steve, it's been a real pleasure having you here in the office.

[00:19:39] I hope you come back soon. For everybody else keep on keeping on and best of luck.

[00:19:44] Steve: Yeah. Thank you, Tony. Great talking with you