First direct-to-consumer companies rely on large amounts of capital and low-cost digital marketing to grow rapidly. But as this sector matures, capital is more constrained, social media is more disruptive, and customer acquisition costs are rising. DTC companies need new marketing methods to find today’s customers, and the 4Cs – content, consumers, creators, and artists – can help.
In the early days of direct-to-consumer (DTC) brands, we saw companies engage in innovative tactics to gain media and PR to help them achieve organic (as opposed to paid) marketing. Casper, the online mattress retailer, did Nap-Mobiles which allows potential customers to test their beds. Airbnb (formerly AirBed and Almusal) is doing a special edition cereal boxes which generated buzz and revenue. Some DTC companies are optimizing their packaging to be “Instagrammable,” enticing people to post unboxing videos organic. Over time, these tactics have become commonplace and therefore ignored. Newer brands have a harder time breaking through the noise.
In those early days, companies were also able to effectively use social media (especially Facebook) to reach their customers and convince them to buy their offerings. The cost and efficiency of acquiring customers through digital channels makes it profitable, and favorable investment markets allow companies to raise capital and spend large amounts on customer acquisition. . Over time, more and more companies began to advertise heavily on social media, making the space more crowded and making it harder to break through the ad clutter.
In recent years, customer acquisition costs (CAC) in digital channels RISE, which makes these channels a small strategy for economic growth. In addition, markets are cooling DTC brands, making them more cash-strapped. In addition, between privacy concerns and Apple’s iOS 14 CHANGES, Facebook has become less effective in targeting customers, reducing the overall efficiency of digital customer acquisition. These changes have led brands to find ways to reinvent organic marketing.
Facing these challenges in 2023, new DTC brands, as well as existing brands, must develop strategies that will allow them to generate organic attention and sales. To that end, they can use the 4 C’s to create organic marketing:
Brands should invest time and effort in creating compelling content that will attract consumers. In the early days of DTC, colorful and creative advertisements made it effective. Casper Mattress was one of the first to create cartoon ads that were more unique and engaging compared to traditional mattress ads. Magic Spoon, a high-protein/low-carb cereal brand, created a colorful ad that communicates the brand’s value: It’s one of the first “us” vs. “them” ad copy on social media, depicting that brand has more protein and less carbs compared to traditional cereal. Hubble Contact Lenses has found success with ads that include articles about the brand, and quizzes about contact lens practices. Brands are also investing in creating blogs and how-to articles to drive traffic to their website and to convince consumers that they are more than a product brand, but a lifestyle and experience environment. of the thing.
In 2023, video and Rolls social media rule. Companies need to quickly adapt to this new medium and create video content to ensure they are top of mind for consumers. While it’s impossible to predict what will gain traction and go viral, generating many different ideas can lead to a winner.
Consumers are looking for authenticity and are less attracted to polished videos. An example of a video that went viral and gained traction is Bobbi Brown’s ANSWERS of a beauty influencer who uses her “Jones Road” beauty products. Milkbar, Christina Tosi’s bakery, was also spotted TikTok success, when they uploaded videos of home recipes in the early days of the Covid pandemic. The company recognized the needs of people who cook at home and capitalized on their brand and products at that time. Chipotle, the Mexican food chain, has gained traction by starting “challenges” on TikTok, encouraging consumers to try the challenge themselves. One such challenge was initiated by an employee who the lid is broken in the Chipotle container that exactly matches the bowl. Some brands incorporate and interpret their own voice with TikTok challenges, or currently trending memes, thus remaining relevant in the minds of consumers and meeting them where they are.
Superior brands and products always naturally acquire brand evangelists and supporters. That leads to organic posts and excitement among consumers, who create their own user-generated content (UGC) that hopefully gains traction.
Sometimes, it can be completely unintentional. For example, Ocean Spray saw a lot of organic attention when a consumer recorded themselves drinking cranberry juice while skateboarding. Other times, brands create their own challenges (using a unique branded hashtag), in the hope that consumers will join them and spread the word. For example, the aforementioned #ChipotleLidFlipChallange generated more than 100,000 videos in six days, with more than 104 million views. This challenge also leads to actual downstream behavior outside of TikTok – more people download the app and order Chipotle.
In 2023, influencers and creators are social media royalty, and sponsors and opinion leaders this time. Unlike consumers, who may post a testimonial or participate in a challenge, influencers often post interesting content that captures the attention of other social media users who follow them. Small creators can have hundreds or thousands of followers, and big ones can have millions of them. Creators of all sizes can create a vibrant community around them. Often, when brands want to expand their content, they partner with creators to post for them, to generate more views.
Creators and brands have different monetization relationships — from per-post payments, revenue sharing, or free products. While this relationship is paid, it helps brands to generate more “organic” visitors, because followers of creators often feel a close connection with them and treat their recommendation as if it were a recommendation. from a friend, rather than a brand. What is important for brands using this strategy is to identify which creators are the best fit for them, and which creators will actually promote and advertise their products.
In some sense, celebrities are mega-creators. They have many followers and therefore are able to influence those followers. For years, brands have paid celebrities to advertise them in ads and in sponsorship deals. We find that brands with strong relationships with celebrities often gain traction. It was formerly known as “the Oprah effect“– anything he recommends goes viral. Celebrities are often able to generate more buzz compared to non-celebrity creators, due to the general public interest in them and their PR capabilities.
In the age of DTC, we see a further evolution of the role of celebrities. We already have celebrity-founded or celebrity-run brands and ventures, including The Honest Company (Jessica Alba), Fabletics (Kate Hudson), Goop (Gwyneth Paltrow), Pattern Beauty (Tracee Ellis Ross), Skims (Kim Kardashian ), Casamigos Tequila (George Clooney), Aviation Gin (Ryan Reynolds), and Beats by Dre (Dr. Dre).
There is a saying attributed to Neil Blumenthal, the CEO of Warby Parker, DTC’s eyewear brand: “It’s not cheaper to start a business, although I don’t think it’s more difficult to grow a business.” We agree. In the new era of retail, brands must adapt and develop strategies to “make” organic marketing. The 4 C framework — content, consumers, creators, and celebrities — provides a guide to unlocking organic marketing. Brands can choose a subset or all of these to sustain their growth and success.