The Data Strikes Back: Creative Volume, DTC Trade Politics, and the Bench Shutdown

The Data Strikes Back: Creative Volume, Trade Politics, and the Bench Shutdown

Talk is cheap. 

Actions speak louder. 

But scientific evidence? That's the real juice.

Today, we dive into hard data about creative testing, a major trade policy shift, and a sudden platform shutdown that's leaving small and medium companies scrambling.

Today:

• Does creative volume really matter? Debate + data

• The 321 Mexican standoff

• A closer look at the Bench shutdown

The Volume Game: Finally, Some Data

Creative volume is the key to scaling on Meta, right? 

That became the best practice in 2024 as brands sought ways to battle creeping CAC and sliding margins. 

But how do we know this for sure?

Two reasons to be skeptical: 

1. Creative agencies backing this tactic could be just “talking their book”

2. You (probably) haven’t seen evidence to support these claims

Cody Plofker, CEO at Jones Road Beauty, started a debate around creative volume unlock this past week. 

Taylor Holiday, Founder of Common Thread Collective (and creative volume evangelist) responded 😂:

Cody had to push to get more, but Taylor eventually opened up. Click Cody’s post above to see the whole debate.

Here’s our summary: 

The data share by Taylor is from Varos, an analytics firm pulling from 5000+ companies and $6 billion in ad spend reveals a clear pattern: brands spending over $100k monthly consistently produce 300+ ad variations.

But it's not just "more equals better" - the relationship between volume and success is nuanced:

• Budget alignment is crucial: Volume must scale proportionally with ad spend

• Ad type diversity matters as much as quantity

• Testing never really stops - even when you find winners

Takeaway: Increasing creative volume is how you scale your Meta budget, which is why the biggest spenders create more ads as their budget increases. From a logical perspective, more ads = more chances to find new winners. 

The only other consideration is cost of production per ad. Consider your media spend + your production costs when determining your profitability and marketing plan.

Section 321's Mexican Standoff

A major shift in U.S. trade policy is forcing DTC brands to rethink their fulfillment strategies. The latest target: Section 321 shipments through Mexico.

Quick context: After cracking down on Chinese giants like Shein and Temu, many brands shifted to routing sub-$800 shipments through Mexico to avoid import duties.

That loophole just closed, specifically for apparel.

Per Aaron Rubin: "321 through Mexico for Apparel is over, effective immediately." The move aims to boost Mexican apparel manufacturing, but it leaves countless U.S. brands needing to rebuild their fulfillment operations.

Key takeaway: The closure of the Mexico fulfillment loophole signals a broader shift in trade policy enforcement. 

DTC brands need to build more resilient fulfillment strategies that don't rely on regulatory arbitrage. Consider this a wake-up call to diversify fulfillment options and prepare for further policy changes.

Breaking news - The Bench Collapse

In a shocking move, Bench Accounting abruptly shut its doors on December 27, leaving 35,000 businesses without access to their financial data. 

The timing - days before year-end closing - couldn't be worse for their predominantly small and medium-sized business clients.

The numbers tell an unfortunate story:

• 13 years of operation

• $113.1M in total funding

• $232M valuation in 2021

• $0 valuation in 2024

• 35,000+ businesses stranded

• 600 employees impacted

But behind these numbers lies a cautionary tale about venture-backed growth versus sustainable business models. 

​Bench's founder, Ian Crosby, revealed that the company's trajectory changed dramatically after the board replaced him in 2021, following a Series C round. Despite having "budding partnerships with companies like Shopify" and a working business model, the board pushed for a new direction that Crosby warned would "destroy the company."

Impact on DTC Brands

For affected businesses, especially DTC brands heading into year-end:

1. Immediate access to financial data will be available until March 2025

2. Migration tools are emerging - Finaloop is offering a 75% discount for affected ecommerce businesses

3. Companies should file for six-month IRS extensions to manage the transition

Key Takeaway: For DTC operators, this is a wake-up call about operational dependencies. 

First, maintain ownership of your critical business data - never rely solely on third-party platforms. 

Second, build redundancy into core business functions like accounting. 

Finally, and perhaps most importantly, watch your service providers' business health as carefully as you watch your own - their strategic decisions can impact your operations overnight.

Quick Hits

Happy Q5 everyone! 

We hope your holiday season was fun (and profitable)