Month: June 2019

Reinvention and rejuvenation
End-to-end integrated desktop solutions hold incredible power. It’s about speed, ease and efficiency, not powerful machines and huge infrastructure. Easy-to-use tools allow content creators to produce compelling content — even with 3D animation and data-driven graphics — and publish directly to social platforms like YouTube, Twitter and Facebook.

Building a digital footprint requires content solutions that integrate seamlessly with traditional tools, with features like integrated centralized media storage and management that speeds up content creation. Tools must also provide powerful branding capabilities, from graphics to video, to help media organizations gain market share in a fiercely competitive environment.

Live streams to growing files
Imagine a busy news organization tasked with a daunting KPI of producing 250 videos per day as part of its corporate digital mandate. Today’s tools must support work with live streams and growing files, facilitate easy highlights clipping, eliminate the need for re-versioning and cut the time required to adapt and render multiple versions of the same story.

Sophisticated templates are liberating, not limiting, giving journalists creative freedom while facilitating faster, easier story creation. Videos can also be automatically adapted behind the scenes for a different look and feel across channels or between departments, ensuring that the publications branding is not lost and appropriate for the relevant platform.

Intuitive tools… from anywhere
Just as important as the tools to create dynamic, immersive content is the ability to do it from anywhere, all through a web browser. It’s about the most agile and creative workflows that empower journalists and other content producers to report, create, edit and brand on the fly and in the field.

Numerous video editing and publishing functions, including automatic adaption to a variety of aspect ratios such as portrait and square, enables stories to be simultaneously published to various platforms. Features that optimize the experience include the ability to add subtitles to video content, which is crucial for users on mobile or in another language.

Power through software
The power lies in the intelligence behind the products: the software. Doing more with less and with greater efficiency is achievable through smart design. Sports rights holders and even teams and leagues have long been known for maximizing tools and innovating around content production and distribution.

Large multinational events like the Olympic Games create a staggering amount of media, including clips and highlights that must be managed and accessed by large numbers of people. Integrated creation and publishing tools allow all stakeholders to access archived assets and publish to local content delivery networks and social platforms in dramatically less time.

The way forward: cross-platform brands
Most traditional media companies have a heavy investment of infrastructure and equipment. While digital-only companies are inherently more agile, the right digital solutions should not bring duplication and layers of complexity, only seamless integration.

Moreover, the quality of traditional content should never be compromised for digital. Choose a vendor that will work closely with you to meet individual needs and integrate with legacy workflows. Today’s best-of-breed tools are capable of doing double, even triple, duty, often in ways that content creators never imagined. They’re flexible by design, limited only by the creativity of the user.

Often, it’s mindsets and skill sets that must change as much as workflows as traditional media organizations and brands accommodate the ever-increasing appetite for digital content, 24-hour news cycles, and burgeoning social platforms. The tools are here now to make digital content not just an add-on, but its own vibrant, integral offering.

The post Reinventing the way traditional media organizations master digital content appeared first on Digiday.

In previous years, NBCU would have a cabana where it would host private meetings with agencies and clients; that’s still in the plan this year, according to a source. But the larger focus for the media giant this year is in courting creative agencies and ad executives with the thinking that the creative side still plays a major role in where marketers spend money — so it would serve NBCU well to have a greater relationship with that side of the marketing.

And a big part of NBCU’s pitch will not only be the creative resources it has to offer, but also how the company can tie that with high-quality content — including live sports and Emmy-winning scripted dramas — and scaled reach that includes 90% of the U.S. households; these are things that social platforms can’t necessarily promise, NBCU executives said.

“What the consumer cares about is the results of last night’s Stanley Cup Final hockey game, they care about Jack Pearson on ‘This Is Us’ and what happened during the ‘SNL’ cold open,” said Linda Yaccarino. “When you are able to take that and successfully integrated brand storytelling, that’s meaningful.”

“If you don’t have anything meaningful to count, then you’re just scrolling through a news feed [mindlessly] and no one gathers around the news feed to talk about anything,” Yaccarino added.

The ultimate goal for NBCU is still in growing its advertising business, but the company won’t be making a direct sales pitch during its programming at Cannes, Yaccarino said. Some of this is driven by the fact that NBCU has had a “stronger than expected” upfront season, which recently came to a close, she said.

“The Cannes festival sits outside of the core business cycle — most of the transactional discussions are largely finished,” Yaccarino said. “It’s different from the beginning of the year with CES, which kicks off planning for the year.”

That said, ad sales revenue growth NBCU is stemming from advertisers that are requesting more “brand-safe” inventory, Yaccarino said. “The constant request for scale from our marketers also comes with the request of it having to be safe scale. Advertisers can’t take those risks anymore,” she said.

With its focus on the creative side, NBCU also plans to promote its talent pool, offering marketers the chance to work with writers and producers from top NBC shows. Its comedy-centric class, for instance, will show how advertisers can set up their own writers’ rooms. Other products NBCU plans to promote include its shoppable TV ad units — with DTC marketers being a major focus area for NBCU — and a piece of artificial intelligence technology that would allow advertisers to run ads based on contextually relevant scenes within NBC shows. This tool has info from 15,000 scripts and closed-captioning files, said Josh Feldman, evp and head of marketing and ad creative for NBCUniversal.

Cannes has become known as a place where everyone — from media companies to digital publishers to tech platforms to ad tech vendors — goes to sell and conduct business. That’s beginning to change, particularly as calls have come from agencies and marketers for Cannes Lions to go back to its roots.

“Looking back for the last three or four years, whether it was entertainment companies, film companies, TV companies, a lot of the people they sent to Cannes were broadly speaking their sales teams,” said Philip Thomas, CEO of Cannes Lions owner Ascential. “A big change over the past couple of years is that these big companies are now also bringing their entertainment and content expertise, and NBCU is a great example of that.”

Feldman said it remains important for NBCU to meet with creative agencies and marketers because many still don’t know the full scale of products the company has to offer. And once they are made aware of something like shoppable TV or an AI robot that can match scripted scenes with ad creative, then that helps NBCU in the consideration set.

“Everyone thinks they do know NBCU because we have been around forever,” Feldman said. “But the truth of the matter is we’re not resting on our laurels and we’re not resting on our legacy.”

The post ‘Safe scale’: Why NBCU is spending more on Cannes (and taking veiled shots at platforms) appeared first on Digiday.

Questions and concerns were varied. What would this do to creative? To pitches? Could unionizing at agencies cause more in-housing? Wouldn’t agencies fire employees for forming a union? What became clear is that interest in unionizing may be brewing at agencies. One art director on the app put it succinctly: “I hear a lot of talk about it.”

The interest makes sense as agency culture is rife with issues — long hours, unpaid overtime, burnout, diversity and inclusion to parental leave and more. According to a recent Digiday survey of agency employees, 32% are worried about their mental health; 33% say they have been harassed; 39% say they have been discriminated against, with women more likely to be discriminated against than men; 21% say they have been discriminated against due to their race and 54% have experienced ageism.

The question of unionizing may be cropping up as it has become popular among digital media companies’ staff in recent years, with the latest being publishers like Vox and Buzzfeed. But it’s not just digital media that has unionized. Other creative industries touching agencies, like entertainment, have long been unionized. Yet, agencies have, for the most part, not. While two agencies said they hadn’t heard rumblings of unionization it’s unclear if the talk of interest unionization has moved from chatter among coworkers to HR or agencies’ C-Suite. Reasons vary: Execs interviewed by Digiday said there was too much collective apathy and competition to make unionization possible.

Representatives for IPG, Publicis Groupe and Omnicom did not respond to a request for comment. A number of individual agencies, including Droga5, Wieden+Kennedy and VaynerMedia, declined to comment for this story.

Asked for comment, WPP referred to its annual report, which says the holding company said that it “support[s] the right of our people to join trade unions and to bargain collectively, although trade union membership is relatively low in our industry.”

In 2018, around 7% of WPP’s employees were either members of a trade union or covered by a collective bargaining agreement. In 2017 that number was 8%.

As for the other holding companies, the only other holding company to mention unions in its annual report was Publicis Groupe, which detailed how due to its “three-year profit sharing agreement signed with the trade union organizations, all Group employees in France received a bonus in 2018.”

“From the outside looking in, it might appear that the advertising industry is a day-to-day unrelenting grind,” wrote Strawberry Frog CEO Scott Goodson in an email. “Where employees are corralled to hit target deadlines on time and on budget, where unpaid overtime is a norm, maternity leave doesn’t exist and taking a vacation is frowned upon if not barred entirely.”

Agencies aren’t alone in their challenges
The challenges faced by agencies will vary but by and large they are similar to those in other creative industries where unions are more common.

The argument is that collective bargaining could help solve — or, at least, be a resource as they work to solve — problems for agency employees. In negotiating a union contract with employers, agency employees would be able to set up the kind of work environment they want.

“Advertising is an industry that hasn’t been unionized traditionally, unlike journalism, so that might be a reason it’s taken so long,” said Nolan. “You look at the structure of agency and it’s not that different from the structure of a media company. There’s creatives, there’s writers, there’s graphics people, there’s business people, there’s tech people. It’s very comparable. There’s really absolutely no reason that it couldn’t be done except that nobody’s done it yet.”

Reasons vary. One agency creative director at a top creative shop said there’s too much movement, too many big egos and arrogance for collective bargaining. Others pointed to the nature of competition within agencies, as agencies often push creatives to compete amongst themselves.

A former copywriter believes existing trade organizations, like the 4A’s, are enough for some employees.

One former agency CEO who has also worked in publishing said agency employees are complacent. “It seems inevitable,” said the former agency CEO of the possibility agency unionization. “There are a lot of people who are working very long, hard hours with little job security. It makes a certain amount of sense.”

“There are a lot of professional well paid people who are smart enough to understand that a union is in their best interests,” Nolan told Digiday. “A union only does what you want it to do because a union has made up of you, the employees, right? The employees are the union. There aren’t going to be rules in your union contract that you all didn’t decide to ask for.”

There could be benefits to agency employees and agencies at large. “Unionized workforces are far more likely to have pensions, a stronger pensions and better health care, more secure pay because it’s all built into the contract,” said Nicholas Devyatkin, employment attorney at Tully Rinkey, who said that while employers likely won’t want workers to unionize as they don’t want to have to deal with outside voices when making decisions but that there can be benefits for employers, like a more loyal workforce, less turnover and savings in terms of turnover costs.

Unionization is spreading in digital media
Unionizing isn’t nearly as popular as it was 60 years ago in the U.S. but in digital media interest has increased. In 2018, the union membership rate in the U.S. was 10.5% of wage and salary workers, down 0.2 percent from 2017, according to the Bureau of Labor Statics. As Digiday previously reported last December, unionization among workers in the arts, design, entertainment and media rose from 6.0% in 2016 to 6.8% in 2018.

The comparison to media isn’t a perfect one. While print media has been unionized for roughly 80 years, digital media interest in unions has only recently ramped up in the last few years. For advertising employees, there’s been nothing.

The business model could complicate unionizing
A consultancy CEO argued the agency business model may make it harder for agency employees to organize. “I’m surprised that hasn’t happened,” said the consultancy CEO. “But it’s been tough for them to figure out how to do it.”

Legally, under anti-trust laws, agencies would not be able to have one collective union but would instead have to be unionized by each agency, the consultancy CEO explained. That’s why, even as the industry is unhappy with the state of payment windows, which came up again recently with General Mills RFP, agencies are unable to collectively agree to say no to those terms.

Given agencies use of freelancers across a number of duties, that could present an issue, said Devyatkin, as freelancers are not protected by the National Labor Relations Act. “So there’s both a legal effect in the sense that they’re not protected by the National Labor Relations Act and then there’s the practical effect of having a labor force that’s a little bit more in flux and transient,” he said.

There’s also the question of how unionization would do to client and agency relationships. “I’m rather doubtful this would benefit any client relationship,” wrote Lisa Colantuono, president of search consultancy, AAR Partners. “Unionized workers often experience less of a sense of partnership and trust with their supervisors and that alone is a detriment for agencies and their clients.”

It’s unclear where agencies would fit
The American Federation of Labor and Congress of Industrial Organizations, or the AFL-CIO, directed Digiday to SAG-AFTRA, the actor’s union, when reached for comment. The actor’s union represents performers in entertainment, including commercial actors, but a representative was unsure where advertising agency employees would fit in and referred Digiday to the Writer’s Guild of America. The Writer’s Guide of America declined to comment for this story. The Communication Workers of America did not respond to a request for comment by press time.

“There isn’t a dedicated union for exactly these kinds of workers,” said Devyatkin.

That confusion could be part of the reason why organizing hasn’t hit agencies. Whatever the case may be, the industry is changing rapidly and that will impact employee culture.

“The industry is shifting into two camps,” wrote Goodson. “Commodity product, where the creative is being delivered cheaply and premium consultant level product. The former is the precursor to machine manufactured advertising. This may in the future create a new climate for union workers or perhaps it’s more likely a massive backlash against the companies that bring AI created advertising to the world and in so doing eliminate human jobs.”

The post ‘The advertising industry is a day-to-day unrelenting grind’: Why agencies should unionize appeared first on Digiday.

“We’re still very much in experimentation mode. For us, it’s about seeing when there is news we can bring to the audience and delivering it. One thing we found appealing, unlike some platforms, Twitch has clear pathways to monetization,” said Phoebe Connelly, deputy director of video at The Post.

Each of these publishers makes money directly from Twitch via in-stream ads, which can run during live broadcasts and in replays. BuzzFeed also limits some of its content to subscribers, where subscriptions cost $4.99 per month. Twitch is becoming a larger percentage of its gaming brand’s, BuzzFeed Multiplayer, revenue stream, said Branden Smith, supervising video producer at BuzzFeed. They plan to add more branded content partnerships, he said. Multiplayer also sells merchandise, which is available on its Twitch page.

Cheddar and BuzzFeed have dedicated their efforts on Twitch to gaming. Cheddar streams an hour-long show every weekday called “Cheddar Esports.” And while BuzzFeed first looked to Twitch in 2018 as an alternative to Facebook Live for streaming events, it’s since focused on growing Multiplayer through Twitch.

Multiplayer typically streams three times per week, with each broadcast lasting anywhere from one to three hours, Smith said. The Multiplayer team has three producers who conceive ideas, produce and edit across platforms.

“We aim to give our audience content where they are naturally consuming, engaging with and searching for content. We saw clearly that Twitch had created an established gaming community, so when we launched our gaming brand BuzzFeed Multiplayer this past fall, it made sense for the Multiplayer team to engage with fans across both YouTube and Twitch,” Smith said.

Multiplayer primarily streams gameplay along with two weekly series called “Scared Buddies” and “100 Baby Challenge.” Viewership varies. One of Multiplayer’s most engaged streams was gameplay of “The Sims 4” and garnered more than 35,000 unique live views with more than 3,800 viewers watching for the entire three-hour stream and more than 4,300 viewers watching at once, according to the publisher.

For each of its streams, BuzzFeed’s team responds to viewers on camera and directly in the comments.

“Twitch enables us to interact directly with our audience, allowing for immediate feedback and engagement that we can incorporate in on the spot while filming,” Smith said.

Similar to Multiplayer, The Post also prioritizes comments on their streams — even as their channel is more about political news than gaming. Last July, The Post launched two shows, “Playing Games with Politicians” and “Live with Libby Casey.” While the first series had only four episodes, The Post has continued streaming talk shows and events such as explaining the Mueller investigation.

“Even when we do a really big tentpole broadcast, multiple anchors, multiple locations, that’s not enough for Twitch. It’s being around the community. We’re also finding we’re getting a lot of great questions of readers there, explaining Mueller’s investigation or explaining what Congress is doing next,” Connelly said.

Twitch’s team is also very collaborative with partners, publishers said. BuzzFeed’s Smith said his team talks with Twitch weekly, prior to and during its streams. Cheddar CEO Jon Steinberg said they’re “fans of the platform and the team,” which frequently features Cheddar Esports on Twitch’s front page. That results in “thousands of concurrent” viewers, Steinberg said.

The Post is still evaluating the best strategy as it invests more in Twitch as well as TikTok. Connelly said that while the video team is thinking more about Twitch and TikTok, they couldn’t be more different.

“While TikTok is extremely short-form, Twitch is extremely long-form. Our interest in Twitch is a symptom of our interest more generally in making sure we’re not just making great video and distributing through The Washington Post but paying attention to where people are watching video online,” Connelly said.

The post Twitch is emerging as a favorite new platform for publishers appeared first on Digiday.

However, despite Facebook’s efforts to bring more international content to Watch, U.K. media agencies remain reticent about whether it can meet their requirements on scale, performance and brand safety.

In the U.S. Facebook reportedly paid news publishers between $1 million and $10 million for news shows, but was willing to ax them if the viewing figures weren’t up to scratch. News publishers are encouraged that platforms like Facebook, Twitter and YouTube, now realize that investing in quality content is good for PR and, hopefully, for users. For news publishers, there’s not much downside to Facebook paying for news shows.

“It’s skunkworks money,” said one global partner in the News in Watch program. “It means we can experiment with different types of news shows. We’ll learn what works. But we wouldn’t be doing these shows if they weren’t paying.”

Facebook claims more than 140 million people spend at least one minute per day in Watch. On average, these daily visitors spend more than 26 minutes in Watch every day, this has nearly doubled in the last six months. Although the company hasn’t released overall watch-time figures.

More viewers mean more revenue, and Facebook also said the number of partners using Ad Breaks — where the platform sells the inventory and takes a revenue cut — has more than tripled in the past year. The number of Pages earning over $1,000 in payouts to publishers and creators per month increased eightfold while Pages earning over $10,000 in payouts per month tripled over the last year, according to Facebook.

Nevertheless, publishers at the Digiday Video Summit Europe point out that viewers aren’t going to Facebook to watch video yet. The majority of viewing is occurring in-feed within the Watch creator content, but the proportion of impressions on Watch is growing as more users are discovering the tab and returning. This makes U.K. agencies reticent about the platform in its current guise.

“While the [Watch] video completion rates are more favorable than in-feed, there is still a gap between effective viewable pricing and being on par with TV,” said Kieley Taylor, global head of social, GroupM. “For Watch, impressions are core to pricing, so duration, while on average stronger, is not guaranteed. We’ve been clear: In-feed video delivery does not offer equivalent effective value as in-stream within the Watch tab or for Watch pricing.”

GroupM still considers Watch for the right media plan, said Taylor. The agency group will observe closely whether the additional content added to the platform will encourage more viewers. GroupM has also been encouraged by Facebook’s brand safety controls, which are the strongest within Watch.

But other agencies feel there’s a long way to go for Facebook to earn back trust around brand safety and become a more relevant U.K. video platform.

“It’s all got very quiet,” said one media agency executive who had expected talks to materialize around direct buys for certain Watch shows. Selling direct is available in the U.S. and Facebook has said it’s considering expanding it. “There are still doubts on media quality, in general, and managing publishers via blocklists specifically,” said the exec.

While this injection of planned international content should rebalance the slate, which is mostly U.S.-focused, Facebook has made smaller, steady moves into sports rights but will need to invest in expensive rights to make Watch a success in the U.K.

“They neither have the expertise nor the experience to build up original content programming,” said the agency exec.

The post Facebook Watch expands internationally but faces skepticism appeared first on Digiday.

It’s something that younger brands are grappling with as they formulate strategies. Zak Normandin, the founder of beverage brand Dirty Lemon, recalculated the brand’s future roadmap and formed Iris Nova, a consumer tech platform to launch new brands faster and set them up with retail partnerships. In December, the company received a $15 investment round led by Coca-Cola.

“Omnichannel is the path moving forward, at least for now. But there’s no playbook for how to build a DTC brand in this current time because things are changing so dramatically fast,” said Normandin. “We have to be market-driven and react to the things that are happening, rather than stay the course of a specific strategy because that’s how we launched.”

A few forces have contributed to the shift in strategy. The taps of secured revenue growth from the sources of a sleek e-commerce store and paid social media marketing haven’t quite run dry, but ground-up momentum to be gained has slowed as categories bloat with crowding and brands compete over the same audiences across once-reliable sources like Facebook, Instagram and Google.

For brands launching in today’s direct-to-consumer retail makeup, assuaging the cost of customer acquisition and raising awareness in a crowded market, while still maintaining first-party data and feedback loops, is top of mind. Under the weight of the category, and increasingly complex business models, the direct-to-consumer label is cracking in its purity, but startup brands still have a similar mission in mind as they navigate their categories: Build sustainable businesses by any means possible (even if that means wholesale) while keeping customer wants and needs firmly rooted in the center of that strategy.

“Everyone’s confused as to what’s going on”
Scrutiny of the DTC category typically stems from founders who don’t want their brands to be labeled DTC at all.

“The term ‘DTC’ is a misnomer. If I had my choice, I would call them digitally native brands — not even digitally native vertical brands, because a lot of them are not,” said Web Smith, the co-founder of men’s brand Mizzen + Main and founder of 2pm Inc., an e-commerce research and consultancy firm. “These brands have the DNA of a digital-first retailer; that’s the only demarcation you can consider now as brands are being spread across these lines.”

New brands have to meet a much higher barrier of entry now that the early-days sheen of a direct-to-consumer strategy has worn off. That effect is particularly apparent in conversations with venture capitalists. That’s not to say investor funding has dried up in the consumer category — CB Insights reported that in 2018, venture capital for consumer brands exceeded $1.5 billion, compared to $426 million spent in 2013 — but the Instagram-brand gold rush has come to an end.

“We look for entrepreneurs now who can clearly articulate the proper strategy for customer acquisition or distribution for their market, and that’s going to be different for a beverage brand vs. an apparel brand,” said Henry McNamara, general partner at Great Oaks Venture Capital, who has invested in brands like Allbirds and Away. “There’s no magic bullet in a direct-to-consumer category that gives you a bigger opportunity than a traditional brand.”

Brand founders have said that the most notable difference in current conversations with investors is that they now send mixed messages regarding the best path to growth. Six years ago, VCs were enamored by any DTC-style strategy, according to Sarah Paiji Yoo, the founder of cleaning supplies company Blueland, which launched earlier this year and raised a $3 million seed round. Yoo previously held the position of CMO at M.Gemi and Rockets of Awesome between 2014 and 2017.

“Pitching those brands, we were in a different period of time where the customer acquisition unit economics were more attractive. Today, we’ve had investors that came out on both sides on questions around topics like distribution,” said Yoo. “Some want you to own the customer and get the higher margins. Others saying DTC marketing is too expensive so just be anywhere, everywhere, which is how you get more massive scale. There used to be a clear-cut approach coming from investors, but not anymore.”

Go-to-market strategy for figuring out distribution and marketing mix is shifting from a clear and defined direct-to-consumer roadmap to something far less linear. Forks in the road have formed, and founders have to choose what’s best for their businesses.

“We’re much later in the cycle now of DTC, and everyone’s confused as to what’s going on,” said Rana Argenio, the founder of 10 Grove, a new direct-to-consumer bedding brand that launched in May.

“There’s no magic bullet in a direct-to-consumer category that gives you a bigger opportunity than a traditional brand.”

CAC hacking
Even as DTC strategies diverge, there’s one truth that holds for across brands: Building a business off of paid digital marketing alone is not something that’s going to happen again.

“In these environments, there’s a moment early on where there’s an arbitrage opportunity, but once that cat’s out of the bag, efficient markets lead profits to zero,” said McNamara.

Brands are still spending on Facebook, Instagram and Google, because they still work. But the better they work, the more expensive they become to see the same results. Brands are also hesitant to put so much dependence into digital platforms known to shift strategies in favor of their own interests. As a result, newly launched brands are building strategies around organic media in order to cut acquisition spend. Kathryn Duryea, the founder and CEO of the ceramics brand Year & Day, launched on Instagram not with paid ads, but by getting products into the hands of influencers and celebrities like Instagram’s fashion director Eva Chen and Mandy Moore. “The press that followed from there enabled us to raise a seed round of funding in May of last year,” said Duryea.

Thanks to what Duryea called “organic brand building” following press pushes (Year & Day is a client of PR consultancy Azione) and the earned media from unpaid influencer promotions, Year & Day’s paid media strategy has been able to act as a supplement and is still unsophisticated, according to Duryea.

“Word of mouth, influencers and press drove the bulk of sales in our first two years, and that resonates with a strong group. It’s the cornerstone of our growth,” she said, adding that “it’s not a perfect strategy, but we think that great brands are going to be shared.”

Companies are also looking to diversify spending by investing in areas that are less saturated, including direct mail, podcasts, out-of-home, radio, OTT video and TV, but the more channels and the more mainstream the channel, the harder it is to track what’s resonating.

ThirdLove, which had revenues of $100 million last year, has most recently devoted marketing dollars to TV. There, reach is unmatched, said CEO and co-founder Heidi Zak, and other companies have caught on: The Video Advertising Bureau reported this week that the top 125 digital brands spent $3.8 billion in TV advertising in 2018, a 60% increase over the year before.

TV’s barrier-to-entry is higher than a social media platform’s, and Zak said that the brand only considered it when it had the money to do so. It’s riskier: unlike a Facebook campaign, the brand can’t reroute spending in result to customers’ real-time responses. But TV serves as the ultimate validation of marketing, which makes the lack of traceability worth it, according to Zak: Running TV ads simultaneously with Facebook ads drives more people to conversion when they’re seeing the brand across two familiar touch points.

“When DTC businesses started, it was almost a purist approach to doing the opposite to everything that was traditional.”

“There’s something about being seen in multiple places that’s important to building a brand,” said Zak. “Attribution becomes harder, but the way we think about it is, who is our customer, what media does she consume over her daily life or the course of her life, and how do we want to play with those areas. To put your customer at the center and go where she is, that’s the goal.”

Throwing out the new playbook
Deep into the DTC era of retail, distribution strategies have eventually led full circle: into the arms of the middlemen.

“When DTC businesses started, it was almost a purist approach to doing the opposite to everything that was traditional — a retail rebellion, you could call it. The attitude of physical retail was, ‘Why would we do that? It’s broken,’” said JB Osborne, CEO of marketing agency Red Antler that’s worked with DTC brands like Casper and Keeps. “It was an idealist approach to a new way of doing business.”

But swearing off wholesale is not a one-size-fits-all approach for DTC brands: It makes more sense for CPG companies than it might a new line of trendy dishes. So while Target and Walmart are gunning after digital brands to attract the customers that they appeal to, brands in other categories are thinking of new types of middlemen. Year & Day’s products are used in The Wing and Soho House, while Dirty Lemon will only be found at select storefronts. “We’re in high-end coffee shops, not Dunkin’ Donuts,” said Normandin.

Not all brands are giving up on selling direct-only. After a test at Bloomingdale’s, Zak pulled ThirdLove out of its only retail partner because of a clash in customer experiences.

As distribution becomes more complex, maintaining the direct customer relationships and first-party data insight that defines the DTC category becomes more complicated. Yoo, the founder of Blueland, said that she sees customers that choose to buy direct over retail as the most loyal customers who can be tapped for surveys and feedback, while retail customers are supplementary to that core group.

Meanwhile, mutually beneficial relationships between retailers and brands, as they play out, are going to contribute to which retailers will stay relevant, and which brands can achieve a certain scale.

“In hindsight, looking back at the last eight to 10 years, it was a necessary moment to snap both the way people were thinking about building businesses and the way consumers engaged with brands, out of the entrenched behaviors and expectations,” said Osborne. “What had to be reset was the dynamic of customers being in charge, because it slipped into this place where retailers were. Consumers have been empowered to demand more and are voting with their dollars and who they want to engage with. Brands are embracing that, and retailers have to in return. That’s a win for the customer.”

The post ‘The term DTC is a misnomer’: Brands recalibrate strategies as direct businesses become more complex appeared first on Digiday.