How to Thrive in Our Current Transforming Direct Brand Economy

Direct-to-consumer companies are leading the revolution

Multi-colored pyramid; from each side hands push the three pieces in different directions while people try to climb a latter to the top
Challenger brands continue to emerge as digitally native consumers use their buying power to bolster d-to-c companies. Getty Images
Headshot of Anna Bager

We are deep in the midst of the direct brand revolution, but where exactly are we? Everyone—publishers, tech, brands, agencies—is wondering the same thing. The direct brand revolution and the fundamental shift that it has brought is just beginning.

There are hundreds of these innovative companies emerging, taking share from incumbent brands while contributing to the evolution of business models and marketing tactics. Direct brand startups have innovated not only in the way they create and distribute their products but also in their performance-oriented approach to marketing. This has made large brands feel pressure to keep up with the newcomers as they seek more innovative, data-driven approaches to fuel their own CRM and first-party data.

The challenges and opportunities that direct-to-consumer companies have created is an ongoing subject with our members, and it will be a key topic when we convene at our Annual Leadership Meeting this weekend. To inform these conversations, we are releasing a proprietary whitepaper today entitled “Pivoting to Growth: Selling Advertising and Marketing in the Direct Brand Economy.”

Our hope in facilitating these conversations is to enable media and advertising sellers of all stripes to organize for success and to adopt the new self-serve, omnichannel, data-driven approaches that have become table stakes for working with any company that sells to consumers.

We can expect to see the rise of more challenger brands as digitally-native consumers continue to use their buying power to bolster the power of d-to-c companies.

The first thing we need to do is to understand a few important points of differentiation:

• D-to-c brands are data-driven to their core and hyper-focused on customer experiences designed to maintain an ongoing conversation.

• Their first-party data is not seen as a sellable asset but as something to be used to create better audiences, products and services.

• Because they own their relationship with their consumers, they expect total control over the path and performance of every ad dollar spent.

Over the past year companies including NBC, Hulu and Simulmedia have recognized these important points of differentiation and have publicly shared new efforts to sell to direct brands. They understand the importance of providing an experience for consumers who are used to viewing media on-demand and purchasing products on mobile and in social, shoppable ad experiences.

While marketing organizations and the types of companies that are buying advertising are changing, the models for selling advertising have remained largely the same. Sellers of all kinds need to figure out how to modernize their sales approach and how to take advantage of the kind of trends and opportunities like programmatic in-housing that are changing the digital landscape. For buyers, sellers and vendors this means making a few key pivots.

Know their brand, product story and how they engage with their target

Use data, real-time reporting and attribution to help them personalize, respond to and understand their customers more holistically.

Enable speed to market via self-serve offerings

Provide low-friction media buying, data targeting and DIY creative tools for direct brands that are used to being hands on.

Be their omnichannel guru

Provide insights on performance economics. Offer a consultative approach to branded content, shopper marketing solutions and storytelling. Use A/B testing, dynamic creative and addressable audience segments that can be tracked for performance.

Create unique (portable) offerings with your data

Package opportunities for direct brands to engage in uniquely targeted ways with your audience and align your data capabilities with others in the ecosystem to enable scale and attribution.

View the shift to d-to-c as an opportunity to find and service new prospects. While direct brands start with smaller budgets, they are often growing faster than their incumbent brethren.

Marketing departments will continue to increase focus on analytics and ROI so partnerships will grow (or stall) based on their ability to prove tangible value. Removing friction from the sales process with self-serve solutions will exponentially increase the number of advertisers that a sales organization can work with and those solutions will improve communication and feedback throughout the process.

In the coming months, we can expect to see the rise of more challenger brands as digitally-native consumers continue to use their buying power to bolster the power of d-to-c companies. Understanding where we are at this moment and how to make the most of it is the key to not only surviving but thriving.

@annabager Anna Bager is the executive vice president of industry initiatives at IAB.