Fresh off the stage Friday, after giving one of the more provocative talks at the Association of National Advertisers' annual "Masters of Marketing" conference, investment banker Terry Kawaja of Luma Partners joined Ad Age to break down why he's bullish on the direct-to-consumer trend.
"This is one of the biggest changes going on in marketing," he says, "Despite struggles of traditional marketers to achieve growth, here's a category of relatively young startups in a relatively short period of time with relatively little capital that are garnering double-digit market share away from category incumbents that have been building brand equity, brand loyalty for decades."
When pushed on whether some of these direct-to-consumer marketers — the more famous of which include the likes of Airbnb, Uber, Casper and Dollar Shave Club — are actually profitable, Kawaja says it's still early. "It takes a while until you get to the profitability, but the key thing is you look at the unit economics and that looks strong," he says.
Kawaja, whose so-called Lumascape charts the complexities of the ad-tech and marketing technology spaces, rails against the industry's opaqueness.
"What the image of that Lumasape now represents is fragmentation, complexity, confusion. It's the image most synonymous with the problems of the digital supply chain," he says.
That said, Kawaja does have a complex view on concerns around privacy. He says the industry will benefit from more standardized guidelines — and that the likes of Cambridge Analytica misusing data to circumvent or distort the democratic process is "as bad as it gets." Still, "When privacy zealots go on and on about how up in arms consumers are about the fact that I know the rough perimeters around your demo and your proclivities, I call [BS]."