Five lessons on navigating the direct-to-consumer landscape
Direct-to-consumer brands are on the radar of every player in advertising—from TV networks trying to woo d-to-c brands with accessible programs and ad solutions, agencies looking to understand their unique needs and larger brands angling to get in the game. As part of the #AdAgeNext series, executives from Allbirds, Boll & Branch, Iris Nova, Hippo Insurance, Anomaly, Work & Co., A&E Network, Viacom, NBCUniversal and Mars Petcare this week came together to discuss challenges and opportunities in d-to-c.
Here’s what we learned:
Why digital channels don’t work for many d-to-c brands
Scott Tannen, founder and CEO of luxury bedding e-commerce company Boll & Branch, argued that digital channels aren’t working for these brands because the “media marketplace was underpriced and now it’s appropriately priced,” and that there’s “a lot of clutter coming in.”
“A lot of brands are spending through and through and then raising the price even more,” he said. “It becomes a really weird space.” Tannen—who worked as associate director of digital marketing at Kraft—said “if you really pull everything back, marketing is cyclical.” Tannen said he’s now fortunate to be selling $200 sets of sheets so he doesn’t have to be concerned with “that constant repeat purchase” like some other companies.
How TV networks are reeling in d-to-c players early
Brian Norris, senior vice president of direct-to-consumer sales at NBCUniversal, said the network offers programs for brands to access content, from linear TV to digital, and tries to reel them in when they’re young. “Ultimately we can help them scale their businesses so when they become household names, they’ve been with us from the beginning,” Norris said.
Karen Phillips, executive vice president of ad solutions at Viacom, said she does “small tests” with d-to-c brands, adjusting creative content and placements to see what resonates with consumers.
How big brands are cashing in
Through various venture funds for d-to-c brands, Mars Petcare has entered the game “early,” said Leonid Sudakov, president of Kinship—which is creating new businesses in partnership with start-ups and industry collaborators. “You have to come in earlier and learn to play in this environment,” Sudakov said.
Being a major brand, Sudakov said Mars Petcare has the advantage of recognizing a profitable startup. “We created the capabilities inside to discern who is real and who is just trying to make a quick two-year stint and then sell out and go to do another thing,” he said. “One of the things we always look at is, does this create a new consumer behavior? There’s so much blind money in this space.”
How first-party data is being revolutionized
D-to-c brands like ThirdLove—the maker and seller of bras, underwear and loungewear—are experimenting with new ways to capture first-party data. ThirdLove’s Veronique Powell, vice president of operations and strategy, said the retailer’s online “fit finder” and other e-commerce technologies provide “a record of every customer and shopper that comes to the store.”
It’s convenient for shoppers, she said, and lucrative for the company, as ThirdLove uses customer data to send lists of items “we believe she should be buying during her first purchase,” for example. “It’s been really fantastic to see actual omnichannel behavior in the data,” Powell said.
How to make your d-to-c brand stand out in a crowded market
For the launch of its Trino sock line, Allbirds took a unique approach—with the help of agency Anomaly Los Angeles—in choosing to release a branded video game that follows mascot Peter as he flies through “The Land of Comfort.” The game, like the brand, is simple: Don’t fall.
“As a young, direct-to-consumer brand, that’s largely built itself through e-commerce and digital platforms, starting to invest in this type of content makes a statement about the type of brand we are and the journey that we’re on," said Julie Channing, vice president of marketing at Allbirds. "And I think that too is something that helped raise the visibility of the brand. We were really, really happy with it and it helped us get clarity on what is the thing that makes us different."
CORRECTION - An earlier version of this story misstated Scott Tannen's quote and incorrectly cited where he previously worked.