Why YouTube Darling Dollar Shave Club Is Buying TV Ads
Conversions Were Cheaper On TV Than Web Video
Dollar Shave Club, with its "Our Blades Are Fu**ing Great" slogan, isn't exactly a traditional brand. Indeed, it's best known for its crudely hilarious YouTube videos. But the firm has increased its ad budget to be where most old-school brands are well-established: TV.
Dollar Shave Club, which got its start offering a $1-per-month subscription plan for razor blades, has been running TV ads since January, but the company wasn't necessarily sold on the concept. Radio historically had been its only offline ad channel, so it could be tracked well, said Adam Weber, VP of consumer marketing at Dollar Shave Club.
"We were very hesitant to go into television in the first place," he said, noting concern that they wouldn't be able to measure it well.
A key reason the blade purveyor is buying more TV is the attribution metrics it gets from Convertro, a cross-media attribution service. Getting a grip on which TV spots down to the daypart "absolutely" led the Club to spend more on TV, said Mr. Weber. "We would not even be investing in television in general," he said.
While direct response TV advertisers have long used specialized 800-numbers to track ad performance, fewer people call those numbers in response to ads these days. Convertro aims to replace that approach. The company measures direct navigation to advertiser websites, or searches by brand, comparing the number of those actions to the number of people who visited the advertiser's site before the spot ran. The spot information comes from post-log data -- the information that shows where and when TV ads actually ran, rather than what was ordered. Pre- and post-log data can differ quite a bit.
Convertro doesn't track or measure actual individuals or households that viewed the spots, said Jeff Zwelling, the firm's CEO.
"If you're running a TV ad, the natural consumer behavior is to type the URL directly or search the brand," said Mr. Weber, who suggested last-click attribution models that attribute acquisition only to a search or display ad click aren't "giving any credit to the TV ad you ran."
Dollar Shave Club pores over the Convertro data, along with its media agency, Media Design Group. "It runs through a model and spits out that the TV ad at that airtime delivered this many incremental orders for us," said Mr. Weber. Convertro data influenced the advertiser to pull spots from a cable news network and move them to a better performing sports network, for example.
Dollar Shave Club's two videos have been watched a little over 12 million times according to Visible Measures; its TV ads were placed on national cable outlets like ESPN, Spike TV and Comedy Central.
he Club has used the measurement platform for the past four months, and found that its cost per acquisition rate fell 48 percent between March and May as a result of applying the Convertro data to optimize media buys. It's currently testing acquisition rates of Facebook ads using the system.
The Club is using a 60-second version of the goofy video that introduced the company and its founder, and became a viral hit. The video featured Dollar Shave Club CEO Michael Dubin bolting through the company's distribution center, leaping on a forklift, chatting up an employee, and chopping shipping tape with a sword. The TV spot features a call-to-action to "Join the club at DollarShaveClub.com.