Meta Just Revealed Why Your Creative Tests Keep Failing

Your Weekly DTC Industry Roundup

Another week in ecommerce and things are getting weird …

Meta just exposed why most "creative tests" are actually feeding the same burned-out audiences through Entity ID consolidation. AppLovin's delivering 2x Meta ROI while simultaneously getting investigated by the SEC for data collection practices. And Halloween spending just smashed records despite 80% of people expecting tariff-driven price increases.

Meanwhile, Common Thread Collective dropped a framework proving that most DTC brands are optimizing toward metrics that have zero relationship to actual profit. Which explains why so many founders feel like they're running faster and faster while going nowhere.

Here's what you actually need to know:

• Meta's Entity ID system is why your "new" creative keeps hitting the same performance walls
• Halloween hits record $13.1B spending even with widespread tariff anxiety
• AppLovin stock tanks 14% on SEC investigation despite crushing performance numbers
• CTC exposes how platform ROAS and business profit have zero correlation
• 25 DTC owners gave 25 different definitions of "good" marketing performance
• Google Ads setup secrets: pixel > feed > shopping > scale for 7-figure brands
• Amazon supplement market reality check: velocity beats branding every time

Time to separate signal from noise …

Sponsor

Maximize every dollar during BFCM with FERMÀT’s Offer & Price Testing

FERMÀT is the leading AI funnel builder that helps ecommerce brands create high-converting landing pages without designers or developers.

Their features include: AI-powered landing pages and PDPs generated in minutes, A/B testing and experimentation tools, seamless integration with your ad platforms and Shopify checkout, customizable funnel templates, real-time performance optimization, and more!

We're partnering with FERMÀT to offer readers an exclusive 7-day trial. Click here to try FERMÀT today!

Try fermat

Platform Updates

Meta Just Revealed Why Your Creative "Tests" Keep Failing

Entity ID consolidation is killing your ability to reach new audiences.

Here's something most media buyers don't know …

Meta's ad system uses something called "Entity ID" to group creative learnings. Think of it like a fingerprint for your ads.

When you upload a new creative that looks similar to an existing one, Meta assigns it the same Entity ID -- even if the messaging is completely different. This means your "new" ad inherits all the performance data and audience fatigue from the old one.

So when you think you're testing fresh creative against new audiences, you're actually just showing the same tired ad to people who've already decided they don't want it.

The solution is true creative diversification. Different products, angles, formats, even thumbnails. Not just swapping out headlines on the same hero shot.

Meta's internal training reveals that minor changes (aspect ratios, small text tweaks) maintain the same Entity ID, while significant visual changes create new ones. The difference between scaling to fresh audiences versus hitting the same wall over and over.

This explains why so many brands struggle to break through performance plateaus. They think they're testing new creative when they're really just serving warmed-over content to burned-out audiences.

Read more details

Market Performance

Halloween Breaks Spending Records Despite Economic Anxiety

$13.1 billion in projected spending even as 80% expect price increases.

Nobody saw this coming …

Halloween spending is about to hit a record $13.1 billion this year, up 13% from last year's $11.6 billion. Per-person spending will reach $114.45, almost $11 more than 2024.

But here's what makes this interesting. Nearly 80% of consumers surveyed believe prices will be higher this year because of tariffs. They know it's going to cost more. And they're spending anyway.

This suggests something important about consumer psychology right now. People aren't cutting back on everything -- they're getting selective about what matters to them.

The categories driving growth? Costumes ($4.3 billion), decorations ($4.2 billion), and candy ($3.9 billion). These aren't necessities, but they're experiences. Moments that matter to families.

It's a different kind of spending than what we saw during Prime Day. Essential household items versus experiential purchases. Both growing, but serving different emotional needs.

The lesson for DTC brands is clear: you either need to solve a real problem or create a meaningful experience. Middle-ground products that are neither essential nor special are getting squeezed out.

See full data here

Strategic Insights

Why Your Marketing Metrics Are Lying to Your Business

Most DTC brands optimize toward numbers that have zero relationship to profit.

This one stings a little …

Common Thread Collective just published a framework that exposes a brutal truth about DTC marketing: most brands are optimizing their entire marketing function toward metrics that don't actually drive business outcomes.

The problem isn't that founders don't care about profit. It's that they're using proxy metrics -- platform ROAS, last-click attribution, MTA models -- that correlate with revenue but don't cause it.

CTC surveyed 25 DTC owners about how they determine "good" performance. They got 25 different answers. That's not just inconsistency -- it's evidence that the industry lacks a coherent approach to measurement.

Their solution centers on three pillars: dynamic budgeting based on marginal return curves, incrementality testing as the source of truth, and calibrating platform optimization with actual causation data.

The key insight is that every business has a unique efficiency degradation curve. As you spend more, returns decline predictably. But most brands either under-spend when profitable opportunities remain or over-spend when returns no longer justify investment.

This isn't academic theory. It's actionable intelligence for brands that want their marketing investment to actually drive enterprise value instead of vanity metrics.

Get the full framework

Platform Drama

AppLovin's Wild Ride Just Got Wilder

The mobile ad platform delivering 2x Meta ROI is now under SEC investigation.

Plot twist nobody saw coming …

AppLovin stock tanked 14% after Bloomberg reported the SEC is investigating the company's data collection practices. The agency is looking into whether AppLovin violated agreements around targeted advertising.

Here's the irony: this is the same platform that Common Thread Collective just highlighted on the DTC Hotline for delivering 2x Meta's ROI with its non-skippable video inventory and "shockingly powerful" pixel.

The investigation stems from a whistleblower complaint plus multiple short-seller reports claiming AppLovin "systematically" violates app store terms by extracting proprietary IDs from Meta, Snap, TikTok, Reddit, and Google without user consent.

But here's what makes this interesting for DTC brands …

AppLovin's stock has surged 80% this year (after a 700% run in 2024) specifically because their AI targeting capabilities have been crushing it for advertisers. The company just got added to the S&P 500 despite short-sellers trying to block it.

So we have a platform that's delivering incredible results for brands while potentially operating in regulatory gray areas. Sound familiar? (Looking at you, Facebook circa 2018.)

The question for DTC founders: do you ride the performance wave while it lasts, or wait to see how this regulatory situation plays out? CTC is running incrementality tests on AppLovin right now to get real data on whether those 2x returns are actually legit.

Either way, this is exactly why diversifying beyond Meta and Google matters more than ever.

Track the investigation

Podcast

AppLovin’s Rise, Google Ads Setup, and Amazon Reality Check

Welcome back to the DTC Hotline, your direct line to hot takes, cold truths, and real e-commerce advice from the team at Common Thread Collective.

In this episode, “The Professor” and “The Chopper” dig into three huge topics shaping paid media right now:

• AppLovin’s Rise — Why this mobile ad platform is suddenly delivering 2× Meta’s ROI, how its non skippable video inventory works, and what makes its pixel shockingly powerful.
• Google Ads Setup for 7-Figure Brands — The right order of operations for success: pixel > feed > shopping > scale. How to avoid double counting conversions and nail your Merchant Center setup.
• Amazon Reality Check — The truth about launching in today’s supplement saturated marketplace. When “velocity” beats “branding,” and how to decide whether you’re ready to compete.
• Plus: Why “decide and commit” is the only mindset that works in new channel expansion and how CTC is testing AppLovin incrementality for real results.

Watch now

Final Thoughts

What This Means For You

Look, this week proves something important …

The platforms that deliver the best performance are often the ones playing closest to the edge. Meta built an empire on data collection. Google dominated through information asymmetry. Now AppLovin's crushing it with methods that may or may not be totally kosher.

The lesson isn't to avoid these platforms.

It's to understand that relying on ANY single channel is playing with fire.

Meta could change their algorithm tomorrow. AppLovin could get regulated into irrelevance. Google could decide your vertical isn't worth their time.

That's why the smartest DTC founders are building measurement systems that work across channels … testing incrementality instead of trusting platform attribution … and optimizing for actual business outcomes instead of vanity metrics.

Because when the next platform shakeup happens (and it will), you want to be the brand that adapts fast instead of the one scrambling to figure out what went wrong.