CPG Digital Marketing: Top Trends and Tips for Your Brand

Most people still associate consumer packaged goods, or CPG, with items sold on the shelves of grocery, drug, and discount stores – but the category is actually much broader. 

CPG refers to the kinds of packaged products that people consume and need to replenish, like coffee, dog food, and soap. Historically, limited space on store shelves drove much of the competitiveness in the market. More recently, CPG digital marketing has offered companies the chance to grow beyond the limitations of physical space and sometimes, even to capture a larger share of that. Find out more about e-commerce digital marketing trends for CPGs and how this information can help inform your marketing.

CPG Digital Marketing Trends and Consumer Preferences

Most people still buy their packaged products in local stores. At the same time, online demand has been growing every year, as demonstrated by these consumer products marketing trends from IRI, an online sales insight service:

  • Online CGP sales grew by over 34 percent in 2018 alone.
  • Online revenue accounted for 11 percent of total consumer packed goods sales.
  • Even more interesting, internet sales of consumer packaged goods made up 64 percent to the total market growth for both offline and online revenue.

Which Platforms Sell the Most Consumer Packaged Goods?

Besides sales numbers, it’s also informative to see what sorts of platforms most of these sales came from. According to IRI, over half of the sales came from internet-only retailers. Some of the largest examples include such online grocery stores as FreshDirect and Peapod. CGP digital marketing from the websites of mostly brick-and-mortar stores produced about one-quarter of the sales. Companies that directly sell their own products have a smaller but rapidly growing share.

How is DTC Marketing Impacting Sales and Growth?

Because of the loss of many retail outlets, manufacturers have recently struggled even more for a share of physical store space. To make up for this loss, they have increasingly bypassed traditional retailers in order to connect directly with consumers. According to the Shopify blog, direct-to-consumer, or DTC marketing, has accounted for 40 percent of sales growth in the market.

Direct marketing has done more than help established CPG manufacturers offset slowdowns in their traditional selling channels. It’s also launched such purely DTC marketing brands as Dollar Shave Club and The Honest Company. In some cases, new brands have begun their lives online, found success, and then made their way into retail stores. For example, Deliciou is an Australian company that markets their packaged seasoning blends online but has also recently found shelf space inside such large U.S. retailers as Whole Foods.

What CPGs Do Shoppers Buy the Most?

What kinds of packaged products do people buy online the most? In general, people most commonly turn to the internet to order non-food items. More specifically, vitamin supplements, pet supplies and food, and skin care products, and coffee have enjoyed brisk online sales. Also, shoppers have increasingly begun to turn to online retailers for more sensitive purchases. As an example, the demand for adult incontinence products boomed by 84 percent in the past year. Consumers turn to internet ordering and delivery options for convenience in sometimes, for privacy.

What Drives Consumers to Choose Online CPG Retailers?

An IRI consumer survey asked online shoppers what options they looked for in e-ecommerce stores. They survey takers could select more than one option. The survey found:

  • Free delivery motivated over half of respondents to purchase online.
  • Almost half said that if the delivery isn’t free, it should be reasonably fast.
  • Four out of ten of these online shoppers also liked in-store pickup options.
  • About one-third of the survey takers would consider subscription services that automatically sent supplies periodically, typically at a discount over just ordering one time.
  • According to the survey, online shoppers also want to find online retailers who will offer them good deals. Over half plan to search for discounts and coupons and use various sites to compare prices.

Using CPG Marketing Trends to Inform Your Marketing Strategy

Right now, online sales of CGP make up a relatively small but rapidly growing share of the overall market. They can help producers offset increased competition for retail store space through online sales. In some cases, e-commerce marketing can even help new brands get established by making online sales and even getting enough brand recognition to earn coveted slots at brick-and-mortar stores. Now that you understand the benefits of selling CPG online, you can explore ways to get consumers to buy products online that they still may be used to picking up at the grocery store.

SEM Marketing for Consumer Packaged Products

Just as it’s important to leverage good product placement in stores, you can use search engine marketing to put your brands directly in front of customers. Both for paid and organic SEM marketing for consumer goods, you need to make certain that you rise to the top for the sorts of terms that searchers are likely to use for products like yours.

For instance, shoppers might not know to look for your brand of hypoallergenic soap or organic, fair-trade coffee, but instead, they may search for those terms or specific problems your product might solve. To optimize your web pages, make certain you research the kinds of search terms consumers might try. Use those terms to optimize your headings, descriptions, and content. In addition, you should try to build your e-commerce shop’s authority by encouraging high-quality incoming links from other relevant websites. For example, you might seek reviews on blogs, issue press releases, or get listed in high-quality directories.

Besides organic search, CPG manufacturers have spent millions of dollars on paid search marketing, according to Search Engine Land. One standard tactic consists of promoting useful content related to their brands. For instance, a packaged food manufacturer might create simple recipes that feature their products. Colgate found success by producing oral health information that related to diabetes. If you find that the direct keywords for your product are too difficult to ranks for in either paid or organic search, you might consider researching some relevant topics that are still interesting to people who might buy your products.

SMM Marketing for Consumer Products

Today’s consumers often learn about products from social media. Social sites can also help you express your brand personality and connect with consumers in a way that helps them identify with your brand. Gartner found that almost nine out of ten companies focus upon delivering a memorable customer service. In a market like consumer packaged goods, when products may seem like interchangeable commodities at first glance, your social presence can provide the key to helping your brand stand out.

SMM marketing also lets you target specific demographics that reflect your buyer persona. For instance, mothers drive a good share of consumer packaged good spending. Moms also login to Facebook about 10 times a day and make up a large part of the audience for Instagram, Pinterest, and other social sites. If you want to target mothers or many other groups, social media marketing can offer you the right audience. If you use the social site’s advertising platform, it will give you the ability to tune your e-commerce digital targeting very well.

For social sites, experiment with a variety of advertising formats and posts. Videos and graphics tend to capture attention, but you may also want to use text sometimes for testimonials, ingredients, or other useful content. Try to showcase your brand’s personality, and certainly, respond to customers when they post questions or comments about your products, ads, or posts.

Even though you should focus heavily on your call to action, you should try to provide plenty of content that will interest customers in a way that doesn’t always seem like selling. Social sites provide a good platform to spotlight your company’s commitment to worthy causes, how your products solve problems, and even your customers. If you’re selling ketchup, dishwashing soap, or lotion, you need to make certain people remember your brand positively, and your social media can help you do that.

Consider Multiple Channels

Customers tend to research online, if they eventually purchase at an e-commerce site or at a local store. Some manufacturers worried about cannibalizing offline sales when they first considered online sales. Many have found that instead of hurting brick-and-mortar revenue, the additional exposure has actually improved demand and even helped them leverage better visibility on physical shelves, besides providing additional revenue through internet purchases. Some companies began purely online and eventually made their way into stores because of their brand recognition.

A recent BrandShop survey found that today’s over 80 percent of consumers expect to have the option to shop when they visit a brand’s website. About the same percentage of survey takers said they’d shop at their favorite brand’s site if they could. For many products, they also like to take advantage of convenient options to have consumables delivered on a monthly schedule.

If you’re going to promote your company and your business website, you might as well give customers the option to purchase there instead of forcing them to find a retailer or distributor. This also lets you take more control over your customer’s experience and also, gather more data on their shopping behavior.

Why Embrace E-Commerce for Consumer Packaged Goods?

With consumer packaged goods, e-commerce is where the growth lies. The exposure, brand differentiation, and extra sales you make online can even help you compete for better placement offline. You’re also not at the mercy of retailers for shelf space and perhaps as important, control of the customer experience and consumer information.

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10 Essential Digital Marketing Tips for Your E-Commerce Store

No matter what you sell from your e-commerce shop, you have a great opportunity to grow your business – follow these steps to gain a competitive edge.

Amazon, the world’s e-commerce leader, enjoyed over $280 billion in revenue during 2019, a 20-percent increase from the prior year. Even much smaller, independent digital shops can do very well with the right e-commerce marketing strategy. For instance, Shopify powers over half a million e-commerce stores, with over $40 billion in sales and an average yearly growth rate of 74 percent.

New or established, large or small, these e-commerce and Shopify marketing tips will help bring more customers to your virtual front door and keep making purchases once they have found you.

Ten effective e-commerce marketing strategies to grow your online business

The success of established online stores should offer you encouragement. On the other hand, you should also understand that you’re going to need to compete with other digital vendors for attention and dollars. To do that, you first need to make sure people know what you’re selling and why they should choose your e-commerce shop over another source. Some of you may also offer new or unique products, so you’ll also need to introduce an audience to the value of whatever you’re selling.

Once you’ve achieved some brand and product recognition, you will also probably have to keep testing and refining your e-commerce digital marketing to enjoy continued growth. In that way, you should view digital marketing as more of an evolving process than as something you can just set and forget. Good e-commerce marketing can take considerable effort. In the end, your effective marketing strategies will also help you enjoy the competitive edge that will help you stand out, profit, and grow.

If you’re just getting started or haven’t enjoyed the success you hoped for, consider trying these 10 e-commerce marketing strategies:

1. Create Buying Guides

These days, consumers spend time researching purchases online. You could engage online shoppers with helpful content that helps people find the perfect gift for their dad, which air fryer features are worth the money, or types of swimming suits that flatter various kinds of bodies.

Whatever you’re selling, people certainly have questions about it. Position yourself as the expert and make shoppers aware of your store by posting helpful buying guides on your social sites, website, and digital store. Besides buying guides, you might also create useful guides to using or caring for various products. For instance, you might sell heirloom seeds and could offer seasonal planting guides or even recipes. This sort of helpful content can improve your marketing and your customer service.

2. Host Giveaways, Contests, and Quizzes

You might think it’s counterintuitive to increase sales by giving things away. At the same time, giveaways give you a chance to spark interest in your brand and hopefully, get some positive feedback from lucky winners. Quizzes, giveaways, and contests can also give you a chance to build your subscription list by capturing names and email address. You can also use quizzes to gather marketing information and target your offers and communications to specific interests. Obviously, you should try to tailor any of these events to the type of audience you hope to attract as customers.

3. Offer Promos, Coupons, and Discounts

Offering limited-time promotions for some or all of your products can have a profound psychological effect on consumers, according to Psychology Today. The article mentioned that with newer and weaker brands, shorter and more urgent calls to action more effectively overcome buyer’s resistance. Stronger and more established sellers may profit more by extending their sales longer. As with other marketing, you might need to test your limited-time offers to see which promotions and durations provide you with the best results.

Also, you can use these limited-time sales as content to promote on your store, blog, and social media. Be certain to encourage your audience to share your coupons and promo codes with their own social circles. Even if one person isn’t in the market for something, they might think of a friend who is.

4. Convert First-Time Buyers into Repeat Buyers

Attracting repeat buyers can help you maximize the returns that you will enjoy from your e-commerce store marketing budget. The sooner you can convert first-time purchasers into loyal customers, the more you can profit. If you offer consumable goods, you might start off by offering a substantial discount or perk for people who take advantage of your offer to send your items by periodic subscriptions. Such consumable items as soap, razor blades, and coffee do very well with this sort of marketing plan. Make certain that you clearly demonstrate the savings that subscription purchasers will enjoy on the order page.

5. Encourage Testimonials and Reviews

Plenty of successful online stores encourage reviews and testimonials from their customers. They may even go so far as offering a gift card or special discount code in exchange for posting a review on a product or service page. It’s even more helpful if the review form encourages the reviewer to share their feedback on their own social media pages. Either way, today’s online shoppers do use reviews to help inform purchases and even a mix of great and not-so-great reviews may look more credible than a page with no reviews at all.

6. Practice Enlightened Self Interest

By associating your brand with a worthy charity you can help improve your community and your positive brand recognition. Figure out what kinds of causes your audience is likely to value and lend your support. One recent study found that Millennials, for example, are even likely to spend more on purchases when they associate the company with worthy causes that they also support.

Also, some charities will help promote their sponsors by mentioning the company on a sponsor page or in a newsletter. Your sponsorship of worthy causes also gives you more content for your social media, blogs, and email or text subscribers. That way, subscribers don’t always associate your communication with just selling.

7. Get Customers to Return to Abandoned Shopping Carts

Lots of digital marketers do everything well in order to attract customers to their e-commerce store and get them to select items to purchase. At the same time, many marketers estimate they suffer very high rates of abandoned shopping carts. In other words, the customer does everything but actually pay for their purchase.

Use built-in features to remind these customers of the deal they’re missing out on and perhaps, even send them an additional incentive in the form of a limited-time discount or free shipping offer. It’s also a good idea to send people with abandoned shopping carts the contact information for customer service, so you can see if there’s some problem that kept the shopper from buying. Perhaps the potential customer was surprised by the shipping rates or wanted another payment option, and that’s information you should learn.

8. Build Subscription Lists

Some online shops offer new subscribers a discount to encourage customers and visitors to give permission to add their email or cell phone number to an email or text subscription list. This additional discount may also entice some shoppers to take advantage of their discount by making a purchase.

Beyond just offering a financial incentive, let shop visitors know that they can also expect value out of their subscription. For instance, you might tell subscribers they will be the first to know about sales or even have the chance to get special offers. These days, lots of people get bombarded by so much digital communication that they’re wary of giving out their contact information, so you need to impress your site visitors with the value you will offer.

9. Use Subscription Lists Wisely

Again, most people get a lot of emails that they don’t read or even send directly to their SPAM folders. Believe it or not, some e-commerce stores have customers who look forward to getting their communications. You need to invest some effort to attract subscribers in the first place, so you want to make certain that you satisfy expectations by always providing value when you do send out emails or texts. As much as possible, try to personalize communication, so you have the best chance to engage your audience. Take particular care with your subject lines to let people know that you’ve written something that is worth their time to read.

10. Build Customer Loyalty

Customer loyalty programs will offer your e-commerce store a variety of benefits that you can translate into profits. It’s almost always cheaper and easier to entice a satisfied customer to buy again than to attract a brand-new customer. That means that your customer service needs to be considered part of your marketing as much as any incentives you offer for repeat purchases.

Beyond just encouraging customers to return to your shop, you can also create a brand ambassador program to motivate your current customers to spread the word about your products or services. Word-of-mouth advertising by your loyal customers can provide you with the most cost-effective kind of marketing, so you should definitely consider ways to encourage it.

As an added benefit, a loyalty program can help you better track customer behavior, and you can use that information to tailor your offerings and communication.

Is that all there is to e-commerce marketing?

For e-commerce or even more specifically, Shopify marketing, you might find almost as many effective tactics as you can find online stores. For example, this article did not touch upon such offline marketing methods as signs, popup shops, and event tables. It also took for granted that you have already created a website, blog, and/or social pages. It also assumed that you had designed an easy-to-navigate, attractive shop and offered high-quality products and great customer service. The best choice of e-commerce marketing strategies may very well depend upon your intended market, budget, competition, comfort with various tactics, and what you’ve already tried.

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DTC vs. Retail: How Brands Win with a Blended Approach

In a world of customized placement, your DTC brand needs to be omni-channel, which is why a proper DTC marketing plan is so critical.

Direct-to-consumer (DTC) brands are riding a sustained growth wave. It’s estimated there are more than 400 significant brands now in this category, while DTC web traffic is growing 100%  year over year. This growth is being supported by performance-based DTC marketing plans.

Don’t think top retailers haven’t noticed. Nordstrom, Sephora, and other industry heavyweights are working overtime to entice emerging DTC brands into the retail space by offering a range of incentives.

One example: Bloomingdale’s Carousel concept, which allows DTC sellers to set up rotating pop-up shops within the storied retailer’s brick and mortar environs.

Yet, as DTC brands would be the first to tell you, this kind of relationship doesn’t come without substantial tradeoffs.

Winning with a blended approach

Wholesale retailers, always eager for trendy, differentiated offerings, have been busy integrating DTC brands at a rapid clip. There’s no question that such relationships offer very real benefits for these brands. A DTC marketing plan that provides proper placement in Nordstrom or Bloomingdale’s can expose DTC products to much wider audiences.

Partnering with an esteemed wholesale retailer also gives newer DTC brands instant cachet and credibility. For a largely unknown brand, an association with a retail heavyweight can be extraordinarily valuable.

Yet these benefits are also somewhat mitigated by the demands DTC brands are facing. Given their reach and capacity, it’s not surprising that large retailers want to get DTC brands in front of a sizable number of their customers. Yet these brands are often ill-prepared to scale up to accommodate placement at 50 stores.

Large retailers also exert a very high degree of control over product strategy and operations. DTC brands that are accustomed to exerting full control over how their products and services are presented and marketed may balk at relinquishing that control. Much of the storytelling, creative messaging or flair associated with DTC brands may be suppressed when these products are presented and marketed by a larger retailer with different sensibilities and prerogatives.

So how do DTC brands thread the needle?

Many of today’s most successful DTC brands have been squaring this circle by pursuing a blended approach. They make wholesale retailers a part of their omni-channel strategy, but only on their terms.

If retailers push DTC brands to scale too early, they resist. If DTC brands believe their messaging is being polluted by clumsy or irrelevant retail marketing, they speak up.

Most importantly, these DTC brands don’t cede control over their narrative. They may be hitching a ride on a larger, faster and more visible ship, but they remain the undisputed captain of their fate.

Looking for a DTC marketing boost?

Attractive and eye-catching product and packaging design is a virtual pre-requisite for successful DTC brands. Luckily for you we’re experts in this field. Whether you need assistance with product design, performance-based advertising and marketing strategies or branding services, we have the necessary expertise to deliver the goods.

Contact Bigeye today for more information about how we can help take your DTC marketing plan to the next level. 

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How to Find Success on Shopify

Shopify, one of the world’s fastest-growing e-commerce platforms, is growing at such a rapid rate that it’s projected to overtake eBay as the second-largest e-commerce platform in 2020, according to CNBC.

While that kind of growth offers massive opportunity for Shopify retailers, it’s also quickly becoming a much more competitive space. Shopify now has more than 1 million merchants active on its platform, all of whom are working to differentiate themselves and outsell the competition.

So what’s the secret to gaining more traction with your Shopify store? Let’s take a closer look at seven key tips for better Shopify store development.

1. Prioritize customer service — and outsource if necessary

E-commerce doesn’t have to mean minimal customer service. In fact, it was Jeff Bezos’ famous “customer obsession” that helped Amazon become a global heavyweight. Yet for most people operating Shopify businesses, dealing with customers is an enormous time suck. While keeping your clients happy is critical, most people simply lack the bandwidth for the task.

Instead, it makes sense to outsource customer service functions. The international call center business is booming, and you can find qualified customer service freelancers on just about any major Gig Economy marketplace. It’s important to ensure that the workers you contract with have first-class fluency in English. Adding live chat is another element that can really improve the customer experience.

2. Focus on the right design

Great design is crucial to the success of any Shopify site. This begins with choosing an appropriate theme. Find one that fits the look and feel of your brand or signature products. The right theme can have a dramatic impact on the visual atmosphere and overall user experience of your site.

While Shopify offers some free design templates, you can also choose to pay for some of the premium designs the company offers. Unsurprisingly, the premium templates tend to be more eye-catching, which can help your site stand out with a fresh look. In addition to the look and feel of your site, you’ll also need to consider how design impacts functionality. Do you want larger images? A wider Instagram feed? These small decisions can have a significant impact on how your products are browsed and purchased, so weigh these decisions carefully.

Generally speaking, it’s also a smart idea to design with certain principles in mind. Your site should feel clean and uncluttered. An overabundance of design elements or products can confuse or irritate visitors and encourage them to depart without buying.

3. Incorporate and optimize elements stressing your originality

Templatized websites run the risk of appearing a bit cookie-cutter, but there are a few steps you can take to make your site appear fresh and original. First, commission striking, original photography and avoid over-reliance on stock imagery. This can go a long way toward giving your site some visual panache that makes it stand out from other e-commerce offerings.

Second, create copy that is truly creative and that engages the reader. Too often Shopify copy is bland and boilerplate. By coming up with lively product descriptions and other copy, you can help convert buyers and differentiate your approach. You’ll also want to choose headlines that stand out from the crowd and that are calibrated to resonate with your target demographics. Figure out why people would be interested in your products and use that as a guide for creating catchy headlines. Humor — in the appropriate contexts — is also a big plus.

4. Check out the competition and test your approach

Auditing other e-commerce sites is a smart way to evaluate your own approach. You can take what they are doing well and adapt it for your own purposes, while also identifying any deficiencies in their approach and capitalizing on them.

Incorporating some simple A/B testing into your site can also help you learn what people are really responding to. These tests allow you to take two versions of a screen, headline or some other element and evaluate how visitors interact with each version. This can be an invaluable tool for learning what converts and what causes people to disengage.

5. Build your social proof

There’s no debating it: Reviews are the lifeblood of any e-commerce store. This means it is critical to monitor your reviews and respond in a timely fashion. If there was a legitimate issue, be transparent and forthcoming rather than defensive, and offer to make it right. This will often disarm even the most dissatisfied customers and help turn negative interactions into positive ones.

Encourage your customers to leave photo reviews whenever possible. Visitors enjoy these and they often seem more credible than text reviews. The more smiling and happy customers you can showcase on Shopify the stronger your business will be.

6. Tread carefully with shipping costs

Excessive shipping costs are one of the most common reasons why customers do not follow through with e-commerce orders. For online retailers, nothing is more frustrating than getting a customer all the way to the checkout page…only to have the product deleted from the cart because of elevated shipping charges.

E-commerce consumers have been conditioned to expect low or no-cost shipping by Amazon Prime, so it’s a wise idea to either build the cost of shipping into your products or figure out an alternative method for defraying costs.

7. Use a well-designed SEO and programmatic ad strategy

An up to date Search optimization strategy plays an essential role in helping people locate you. Most site owners aren’t experts at search, so it often makes sense to bring a marketing agency or SEO expert into the mix. The rules governing SEO are always evolving, so working with an expert can save you the hassle of trying to master search and remain perennially current on the latest changes to Google’s ranking algorithm. It also makes sense to work with a Shopify agency that specializes in this kind of overall site development.

Pay-per-click ad strategies are easier to learn, as you can get a lot of traction by researching keywords and slowly refining your approach over time. Taken together, both strategies can go a long way toward jumpstarting your Shopify revenue.

The takeaway

Shopify is second only to Amazon in terms of the opportunity it offers e-commerce retailers. By following these seven tips and practicing smart Shopify development, you can get faster traction, differentiate your site and generate more revenue.

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Starter Children, Fur Babies, and a DTC Success Story

If your fur baby could help lead you to a $250 million DTC subscription service, wouldn’t you want to be set for success?

Millennials are delaying child-rearing. Millennials love dogs. Millennials are receptive to DTC subscription services and advertising.

What do these three things have in common?

They’re a recipe for a $250 million business.

Barking up the money tree

It’s hardly surprising that younger people are delaying home-purchasing, parenting and other traditional milestones. Student loan debt is at historic levels and wage growth has been flat.

While you can’t eliminate the paternal/maternal impulse, you can reroute it. Priced out of parenthood, millennials are turning their thwarted parental impulses toward pets. 

Call them starter children, fur babies, or absurdly over-indulged animals, the numbers don’t lie: 44% of millennials see their pets as proxy children.

Brands in the flourishing pet care space have been quick to capitalize on this sentiment. Yet none are quite so well-positioned as DTC brands, who are firmly in the millennial sweet spot. They offer boutique, cleverly marketed products to a narrow yet hardcore audience; they deliver to your door and they are price competitive.

That’s more or less the millennial trifecta, and one of the brands that have been most successful at deploying this strategy is BarkBox. 

BarkBox is a DTC subscription service that delivers a box of dog treats to your door. Not revolutionary, sure. Yet the idea plays beautifully on several consumer preferences.

  • You don’t have to leave the house and visit a pet store full of poorly-differentiated toys and treats
  • You don’t have to spend time choosing what to buy
  • Your dog treats arrive in a box, curated for your pet’s enjoyment
  • The contents of each box are a mystery, making the process a bit like opening a gift
  • BarkBoxes are sold direct-to-consumer, with the parent company (Bark) largely relying on Facebook for marketing during its early growth phase

That’s a winning formula, and not just for pets. Another popular DTC subscription service, Universal Yums, curates boxes of candy and snacks from across the globe and sends a new box from a different country to subscribers each month. 

BarkBox, which handles its creative in-house, recently tested its first direct response TV ad, then measured the number of new subscriptions gained in the immediate wake of the ad. It’s a strategy that many DTC businesses are following, as they try to do more with less outside the confines of the traditional large agency model.

Direct to consumer marketing strategies have a variety of powerful benefits for brands such as Bark: They allow more control over brand messaging, they reduce costs, and they enhance flexibility.

Partnering with the right DTC marketing agency can help small businesses unlock these benefits and drive real, tangible results.

The takeaway

Small DTC businesses often lack the resources to partner with the largest agencies – yet that doesn’t mean they can’t have access to world-class campaigns. At Bigeye, we understand the DTC subscription service and advertising market on a deep level, and we’re nimble enough to help you create compelling direct to consumer marketing campaigns on demand. 

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Why Direct to Consumer Brands Need TV Ads

Direct to consumer brands are winning market share from brick and mortar retailers – but they need the power of legacy TV to take the next step.

Direct to consumer (DTC or D2C) companies have taken full advantage of paid social and paid search to bootstrap growth. The dominant digital ad trio of Instagram, Facebook and Google has allowed DTC brands to reach vast audiences on a fairly limited budget.

Yet if DTC brands want to maintain or even exceed their early growth trajectory, they need to look beyond direct to consumer marketing to a legacy channel: Television.

Why DTC + TV is the growth equation for brands

According to data from the Video Advertising Bureau (VAB), TV spending among DTC brands is rising. The Bureau tracked Nielsen research data from 125 DTC brands and found that they spent $3.8 billion, collectively, on TV ads in 2018.

The more interesting statistic, however, is this: 70% of these DTC brands were spending ad money on TV ads for the first time in 2018. Top spenders in the DTC TV ad category include prominent names such as Chewy, Smile Direct Club, Purple and Peloton, all of whom spent more than $100 million in 2018 alone.

Purple, a mattress company, was particularly notable, spending $140 million after spending almost nothing on TV ads in 2017.

In many cases, this was money well spent. Peloton, for example, doubled its sales to $700 million in 2018 after increasing its TV ad spend by 48%.

Overall, DTC brands increased their total spending on TV ads by 60% in 2018. Total ad investment by all brands in the category reached $3.8 billion last year.

What’s behind the increased spending?

There’s a reason why DTC brands are pumping money into TV in unprecedented numbers: They need to scale, and quickly. DTC companies have, in most cases, validated themselves and their model within the market; now they face heightened competition from other DTC brands and traditional retailers who are rolling out their own DTC strategies.

This trend is supported by changing consumer behavior. According to a study from YouGov, 64% of Internet users say that 20% (or more) of their total purchases will occur through DTC brands. Businesses are staking out territory now to capture this revenue.

TV is playing a critical role in this process, as DTC brands seek to leverage its vast reach to drive viewers into the online marketing funnel, as shown by VAB data:

  • Turo, a car sharing startup, increased online video views by 5,100% after increasing its TV ad spend.
  • GrubHub increased its online video views by 1,100% after tripling its TV ad spend.
  • Poshmark saw online search queries increase by 6,900% after increasing its ad spend by 8,400%.
  • Barkbox witnessed a search query gain of 824% after increasing its ad spend by 726%.

Current data also shows that viewers are receptive to this strategy. Research done by Telaria showed that DTC shoppers who are shown both linear and connected TV ads are twice as likely to buy. 

Overall, DTC brands are using TV to exponentially increase exposure and awareness, which results in massive increases in search interest, online engagement and, ultimately, sales.

Another factor influencing DTC growth is cost. While digital advertising is still much less expensive than TV, the cost of advertising on Facebook and other platforms is rising. 

The takeaway

DTC brands have used a digital-first approach to grow and win market share while operating on relatively small budgets. 

That strategy, however, is becoming less relevant as DTC brands mature. In order to reach the vast new pool of consumers outside their digital sphere, it becomes necessary for DTC brands to enter the TV market, where potential buyers can be engaged and guided to online channels. 

At BIGEYE, we’re experts at helping DTC companies reach their full potential through savvy media buying and strategy. We can help you scale and reach new audiences with creatively inspiring new campaigns, smart media buying strategies, and advanced audience analysis and market intelligence.

Don’t hesitate to reach out to us today to learn what a truly great marketing campaign can do for your brand.

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