The DTC economy is exploding. To capitalise on the opportunity, DTC brands need to ensure they are set up for growth beyond what opportunities are available in walled gardens such as Facebook and Google. In this piece, Shane Shevlin (pictured below), SVP strategic development, IPONWEB, tells DTC Daily how direct-to-consumer brands can be connecting with untapped users outside these walled gardens. 

Consumer appetite for DTC brands is huge at the moment. What can DTCs be doing to ensure they are reaching as many of these potential customers as possible?

DTC brands need to make sure that they are not limiting themselves to a single channel or touchpoint to reach consumers. Looking beyond the walled gardens to find untapped audiences or re-enforce messaging to existing customers is a strategy that is beginning to pay dividends for many DTC brands who are looking toward their next phase of growth. Social media is a great tool to easily find your audience or prospective customers. However, just because it’s easy to find them on social media doesn’t mean that’s where they hang out all the time.

DTC brands who invest in data insights to acquire open-web ad inventory in an effective way are beginning to see the true value of these opportunities, both in terms of the attractive price point to acquire attention but also in terms of the context in which those opportunities emerge. New media types such as on-demand audio and highly targeted addressable TV allow for an immersive user experience with the right creative and message.

In fixed audience pools like those found in the walled gardens, DTC brands will eventually reach a saturation point; DTCs need to reach new audiences by activating their data through techniques such as targeted prospecting, loyalty/retargeting programs, as well as cross channel and multi-touch messaging strategies. The insights derived from this type of activity can then be used to inform new channel / media type experimentation, like with native display and even out-of-home. As more formats begin to be programmatically traded, the wealth of data generated outside of the walled gardens, in combination with unique first party data, can be used to “cross-pollinate” these new opportunities and start generating a return straight away.

Is relying on the largest social media platforms a viable strategy for DTCs looking to scale their business?

Social media platforms have huge reach and rich customer data, and, important for DTC brands, they’re easy to use, enabling companies with small marketing teams to scale quickly. However, inventory is finite and competition is steep, so as more brands enter the space and start to leverage the major social platforms to reach the same audiences with the same data and creative formats, returns from those channels will diminish. Already, DTC brands are seeing rising CPMs on Facebook and Instagram, which is pushing them to look outside of social to find new pockets of valuable customers in a cost-efficient manner.

As DTC brands look to scale, what other potential opportunities do you see for them to tap into?

There are a number of opportunities that are ripe for DTC brands to pursue. Looking beyond the walled gardens, other media types provide incremental reach and cross-channel exposure, a critical marketing component in an increasingly fragmented media ecosystem. For example, digital audio reaches over 31 million people in the UK, while digital-out-of-home (DOOH) is seen by 50% of the UK population weekly. The shift from linear to addressable TV, which is forecast to grow more than 60% in 2020, enables audience-based targeting down to the household level (and individual level when consumed on mobile or tablet devices) – ideal for data-driven DTC brands worried about advertising waste. These channels represent new and rich creative formats that allow for effective direct to consumer story-telling that build brands in differentiated and unique ways, and all are available at scale through programmatic media buying. DTC brands need to start building out their expertise in this discipline, using programmatic to test new strategies and formats quickly, unlocking new audiences and performance pockets with full transparency and measurability.

Outside the main social media sites and apps, the places consumers spend time online is hugely fragmented. How can DTCs begin to make sense of this? 

DTC customers are out there in other channels and you may be missing them. And it’s just too hard or expensive to figure out how to solve the problem so I’ll stick with what I know on social…my sense is that this is what many DTC brands may be thinking in relation to programmatic media buying. The reality, however, is that we should let technology solve the mundane, mountainous tasks around processing the global open-web bidstream, sifting through the billions of new ad opportunities that come online every hour of every day. Companies like IPONWEB and our peer-set have invested millions to solve the huge scale engineering challenges that the open web presents – take advantage of that investment to further your own growth just like you have done with the social networks.

Shane Shevlin, SVP strategic development, IPONWEB

To ensure that you can find your desired audience, data is your secret weapon. Brands need to utilise their understanding of their consumers and activate their first-party data in a holistic, media-type agnostic manner and programmatic is an ideal methodology for buying media across formats.

Brands should use their first-party data assets as a “seed layer” to feed machine learning predictive models that can find similar audiences online and on other channels. By using automated media-buying technology, DTCs can take ownership of their media buying strategies, creative/messaging strategies and campaign analysis, leaving the mundane tasks to the technology that was designed and built for that very purpose.

How can DTCs leverage the data and intelligence they possess on their customers to help them scale?

For DTC brands, their unique understanding of their existing customer base is the key to growing their businesses as it’s this data that can be used to scale their interested audience pool, which in turn can become their next million customers. To do so, they need both data portability as a priority to ensure that they can seed predictive models to go out and find similar users. Machines are surprisingly efficient and finding needles in haystacks but they need to know what the needle looks like first. That’s why it’s essential you can access identity-level granularity when it comes to exporting campaign tracking data from social networks. If you are not seeing this, then perhaps ask yourself: why not?

Outcome-based media buying can be optimised against real-world data signals, like an actual purchase of an item on- or offline. Frequency-to-conversion and cross-device analysis can be used to optimise the ideal advertising frequency and pathways both for existing and new customers. Finally, DTCs can begin to understand much more about the consumer journey from the open web (given its diversity of media, context and format types) than they would from social activity. This powerful data can tell us which behavioural traits are most prominent when optimising to a higher life-time value, for example. DTC brands can in turn also ensure, with intelligence derived from this rich dataset, that they are not over-exposing and over-spending on social channels, hitting scale or diminishing returns thresholds or increasing conversion costs.

View the original article at DTC Daily