BY PETER SAYN-WITTGENSTEIN, PUBLISHED DECEMBER 20, 2022 ON TRANSFORM MAGAZINE

No one needs to be told today that consumer wallets are stressed. Inflation is running high, interest rates are rising, and a recent survey by the National Association for Business Economics found that more than half of US economists believe that the US is headed into a recession in the next 12 months.

If you are a brand that primarily sells direct to consumer (DTC), this could put you on high alert. With a business model that relies heavily on customer acquisition and limited marketing channels, even a slight drop in consumer spending can pose a threat. Worse still, no one is exactly sure what a successful recession playbook looks like for DTC brands. The last major downturn happened in 2008/9, long before DTC-friendly platforms like Instagram went mainstream.

The market certainly reflects the uncertainty, with DTC stocks like Stitchfix, Blue Apron, and Warby Parker at historic lows. While each of these companies has its own unique issues, the rocky road that’s probably ahead isn’t doing them any favors.

Still, DTC brands shouldn’t hit the panic button just yet. In the first place, downturns typically don’t last long. According to Kiplinger, the average recession since World War II has only been 11.1 months long. Brands that manage to stay the course should view tough times as an opportunity to come out stronger than before.

In addition, they have plenty of ways to maximize their chances. If you’re looking to do more than survive the coming recession, here at some things to consider:

Stay the course on advertising. 

While it may seem counter intuitive to keep up your spending levels, it’s imperative for DTC brands to maintain visibility during a crisis. A recent article by Kantar lays out the case, showing that the average short-term sales lift from advertising is 4.5%, meaning that if you rely on two major campaigns a year, you’ll lose 9% of your revenue. A Metrilo study also found that DTC loyalty is only around 28% on average (vs. 50% for CPG brands, according to Kantar), making it imperative for them to stay visible and keep adding customers.

Fish in other ponds. 

Most DTC brands concentrate their ad spending in a few channels. As smaller players, they become adept and innovative advertisers on one of two platforms, such as Instagram, TikTok, and Amazon. As other brands drop their advertising, the cost of entry into new platforms will also likely fall. This gives you an opportunity to diversify your outreach to an entirely new customer set. A particularly promising idea is to go from a pure social media play to addressable TV, where you can connect with consumers in a more robust and intimate way.

Get creative with bundles. 

Dropping prices is never a smart strategy because it conditions customers to pay less for your products and services. But you can still lower the cost of entry for your brand, which is vital for attracting new customers with less spending power. Your nine-piece knife set can easily become three or four. You can bundle, cross-promote, and also repackage your products to meet consumers where their wallets are today.

Reward loyalty. 

Repeat customers are always the best customers, but just how valuable they are may surprise you. The same Metrilo study cited above found that loyal customers account for 60% of DTC sales on average. In some categories, like pet products and high-performance clothing, the rate is even higher. So, either develop or lean heavily on your loyalty program during the current climate. Communicate often, offer incentives and rewards more quickly, and be sure customers know where and how to purchase your products.

Perhaps we’ll get lucky, and the recession will fail to materialize (the most recent positive jobs report was encouraging). But whatever happens, DTC brands should enter this period with a laser focus on their present and future customers. The ones that plan for the recovery will do much better than those that prepare for disaster.

BY PETER SAYN-WITTGENSTEIN, PUBLISHED SEPTEMBER 16, 2022 ON MEDIAPOST.COM

Being a technology marketer is more challenging than ever. By nature, the solutions and services you need to promote are complex. On top of that, you’re often dealing with multiple audience segments for the same product—each one having a different level of technical understanding.

That doesn’t add up to easy decision-making when it comes to deploying your digital marketing budget.

For most marketers, the default approach is to go with one of the 800-pound gorillas in the room like the Google Display Network, Meta Audience Network or Amazon Advertising. These walled gardens offer easy scale, but is their ‘take our word for it’ approach to data the right choice for your objectives? On the flip side, is the open internet (aka everyone else). Could your dollars be working harder for your brand outside the big three’s comforting walls?

Let’s take a closer look.

WALLED GARDENS

Walled gardens are closed ecosystems where one entity controls access to the audience, technology and ad inventory. Let’s take Facebook as an example. As a user, you log in, search, like, share, comment, then pop over to Instagram and go down a rabbit hole or two. That’s all juicy data that helps Mark Zuckerberg paint a reasonably detailed picture of who you are and what you like. Now multiply that by about three billion. The sum of all that data is the carrot that Facebook dangles in front of marketers—and they’re more than eager to pay for access. According to eMarketer, Meta, Google and Amazon are on track to gobble up 64% of the ~$200 billion spent on digital ads in the U.S. in 2022.

PROS

SCALE MADE EASY

With so much data at their disposal, walled gardens offer incredible targeting capabilities. Want to get your message to CTOs on the west coast who just started a new job, are interested in PaaS solutions, and like pickleball? Click, click, click. Done. The ability to easily leverage that type of precision at scale is incredibly enticing and can be monumentally powerful.

NO COOKIE, NO PROBLEM

Marketers have been mourning the death of third-party cookies for years. These little ID markers follow you around the internet from an originating site (or ad) and spit back your data, compiling a robust profile of who you are. Privacy advocates cheered when Apple and Mozilla (Firefox) blocked their use, and with Google Chrome phasing them out starting in 2024, it will truly be the end of an era. But let’s remember the key words: ‘third’ and ‘party.’ The beauty of walled gardens is that their world is built on logged-in users. That means their data profiles are based on Grade A, first-party audience tracking. And there’s no opting out of that.

CONSIDERATIONS

ME DATA ES SU DATA

The price of the convenience and scale you get with walled gardens is a lack of transparency. While the networks that run your ads, like Google and Facebook, get to see and keep all the granular data your campaign creates, marketers are only provided with vague success metrics (like impressions and clicks). It’s very much a black box. In fact, the data your ads generate are more likely to benefit your competitors who are after a similar audience as it will have helped the walled garden refine target behaviors. 

HAVE WE MET BEFORE?

It makes sense to build a marketing plan around your customer journey—especially in tech, where the awareness and consideration cycles tend to be longer. The challenge with walled gardens is that they, um, have walls. There is no easy way to apply the insights gleaned from one walled garden to another. That’s largely intentional. Facebook, Google and Amazon return very few insights that can be acted on or applied to other properties to help optimize your campaign. What you end up with are a series of silos that not only take more energy to manage and orchestrate, but the approach flies in the face of customer-centricity. This can result in situations where you end up using top-of-the-funnel creative on a prospect that is actually deep in the decision-making phase. A wasted opportunity that you’ll never know about.

THE OPEN INTERNET

Outside the gilded walls of Facebook, Google, Amazon and the like is the open internet. From a marketing perspective, its millions of digital properties are stitched together by dozens of AdTech companies that either help companies buy ad inventory (Demand Side Platforms) or help publishers sell it (Supply Side Platforms) through ad exchanges. Some of these companies, like The Trade Desk, are trying to consolidate the inherent power of the open internet by offering a connected marketing realm that gives brands a broad spectrum of inventory (from websites to streaming TV) and full data transparency.

PROS

DATA ALL DAY LONG

No black boxes here. AdTech firms use their own data and data marketplaces to help you create precise audience profiles and even extend upon them with lookalike modeling. Once your campaign is in the market, the data you get is objective, detailed and actionable. This means that if a user watches your brand video ad on Site A, you’ll know to move them down the funnel with a product ad on an industry website they’re likely to visit next. The power to control, sequence and optimize your message across a broader range of the customer journey is something that walled gardens simply can’t replicate.

SAFE ISN’T SOUND

It’s easy to tell your boss that you’re allocating the bulk of your budget to a name like Google or Facebook. They’re big, they’re trusted, and they deliver volume. But safe isn’t what sets brands apart. There is tremendous potential in running a smart, responsive campaign on less-tread-on (but more relevant) properties and mediums that the open internet can deliver.

CONSIDERATIONS

FRAGMENTED THOUGHTS

With walled gardens, you know who sets the rules. While Google’s process and data definitions differ from Facebook’s, there’s one source of truth when dealing with each of them. There’s a certain comfort in not having any options. With the open internet, on the other hand, there are loads of competitors, each with different perspectives on how they can benefit your brand—and how they’re better than the ad platform down the street. Option paralysis can set in, making it more tempting to default to the expected choice.

MEET THE NEW BOSS…

If third-party cookies are no more, then how will companies outside of walled gardens stay relevant by capturing data that enables targeting? By creating cookies that aren’t cookies, of course. The Trade Desk is leading the charge by proposing Unified ID 2.0. It’s a system that would give every user an open source, encrypted ID based on their email address. It sounds good in theory as it removes personally identifying information from the equation. However, for it to be effective, users will have to log in to every digital property that becomes part of the Unified universe. While they have some big names on board already (Buzzfeed, FuboTV, Foursquare), critics suggest that it would just create another walled garden, albeit a bigger, more inclusive one.

THE BIG TAKEAWAY

The battle between the walled titans and the open internet is just beginning. The nice part is that, as a tech marketer, you don’t have to choose sides. But you do have to look at all the options—and beyond cookie-cutter media plans. And when you find the right mix, hit it hard with creative that’s impossible to ignore. There’s no bigger shame than having a bold tactical plan that’s failed by work that doesn’t differentiate.

HOW BRANDS AND AGENCIES CAN PRODUCE CONSISTENTLY GREAT WORK IN A FREELANCE WORLD.

BY KRISTIE BROWN, PUBLISHED ON DECEMBER 21, 2022 ON ADAGE.COM

Agencies and brands realize that full-time employees, and especially the creative ones, probably aren’t working just for them. Whether it’s for friends, non-profits or even to build an independent business of their own, most people in the industry do side gigs.

Creative people need to express themselves in different media, build their skill sets outside their core capabilities, and earn a little extra cash too. It’s also no secret that many agencies use a rotating bench of freelancers. Even the largest never have all the people and capabilities they need in-house.

After years in which agencies favored open offices that meant to facilitate collaboration, the pandemic taught everyone that they could work just fine from home. That’s led plenty of creatives to ditch the employee model in favor of one where they get to set the rules.

This has been both a blessing and a curse—freelancers frequently have the experience a job needs while clients have the right to creative continuity. If they’ve hired an agency for its portfolio, they should not get whatever set of teams it can throw together at a given moment. They paid for a certain level of quality, and they should get it.

To make this happen, agencies and brands need to fix the freelance models of the past. They can no longer hire independent workers from temp agencies for specific roles and discard them when they are no longer needed. They need to realize that what a modern team looks like—a hybrid, dispersed group of talented individuals working together but often remotely. They need to build durable connections with talent both in and outside of their offices. Here’s how they can get it right:

HAVE A STRONG CORE

To ensure continuity, you still need full-time employees in key roles. This team does not have to be large, but it should contain the account leads who are going to interface with the brand daily, the key creative people who will be the ultimate overseers the project and a technology lead as well. Make this core team available to your clients; they should be the face of the effort.

WORK WITH THE SAME VENDORS

Limit the size of your freelance pool to the extent possible. Build reliable relationships with freelancers who have the skills and experience to support you in a broad range of activities. Not every agency, for example, has a great video capability. So, find a production team that is a good match for you and use them consistently.

THINK PERMALANCER, NOT FREELANCER

While freelancers don’t want full-time jobs, they appreciate consistent levels of work. It’s best to give them retainers for 10 hours a week or 30 hours a month, rather than hire them on a project basis. Buy their time, manage it correctly and use it efficiently. The more they know that they’re going to work with you, the more they’re likely to be around the next time you need them.

GIVE THEM CREDIT

Agencies have long obscured the role of freelancers in their work. This has always seemed to me a small-minded practice. When it comes to giving credit, even with awards, make sure that everyone who works on a project is equally recognized. This is basic fairness, but it also increases the loyalty of your temporary workforce.

RECOMMEND THEM

Agencies have also been reluctant to recommend their freelancers to others. The logic is that you can keep that talent to yourself (and maybe keep prices low). You’re not doing them or yourself any favors this way. Just like creatives in your own agency, freelancers benefit from a wide range of experiences and opportunities. The more they develop, the more valuable they will be to you.

While every agency relies on freelancers, they rarely put much thought or investment into them. But with so many great people opting to work in the gig economy, brands and agencies need to embrace this reality with forethought and strategy. Merely because someone is giving you 10% of their time doesn’t mean that you should treat them as 10% of an employee.

Instead, build close relationships with your talented freelancers, use them consistently and treat them fairly. It’s always much better to have a deep bench of available talent than a rotating cast of unfamiliar faces.

BY AHAB NIMRY, PUBLISHED JANUARY 31, 2023 ON CLICKZ.COM

Apple’s advertising has taken an unusual turn. A recent video promoting iPhone 14, for example, starts with a darkened shot of a helicopter and helmeted workers frantically sprinting toward it. Called “The Rescue,” it touts the phone’s ability to text via satellite if you lose yourself in the wilderness far from a cell phone tower. Another recent video promotes the device’s car crash detection, while a similar Apple Watch spot touts its survivability in extreme circumstances. Why is it focusing on these value propositions?

THESE ARE DARK, IF NOT UNCERTAIN, TIMES

Well, Apple has always been particularly good at getting the Zeitgeist right. And it is certainly reflecting something in the air. War, unrest, and inflation have driven huge spikes in food and energy prices, and unnerved consumers around the world. That said, the latest data also shows that major economies may be avoiding the worst of their fears. Unemployment remains near historic lows, and the US GDP rose an unexpected 2.9% in Q3 2022. The most recent inflation numbers are looking up, and in spite of dire warnings from economists, Adobe Analytics reported record online Black Friday sales of more than $9.12 billion.

Countless publications consistently tout the economic climate we find ourselves in as ‘unprecedented’ and ‘uncertain.’ Inflation is straining wallets, but are things bad as they seem? How can brands build a little more certainty into their world? The answer may lie in a different aspect of the dark Apple ads: An urgent focus on value marketing and the critical utility they deliver. Here’s how to get it right.

HOW TO DRIVE VALUE MARKETING

VALUE MARKETING: GO BIGGER OR GO HOME

Chances are today, you’re facing a constrained marketing budget. Even though plenty of authorities, including The Harvard Business Review, consider this the wrong choice, it’s a fact of life for many marketers. If so, circumstances may tempt you to check your turn to less expensive advertising outlets, like social media. A better idea is to up the intensity of your ads. Take the risks you have always known you should. Make sure that whatever you create is so memorable that it makes up for the lack of volume. Apple is certainly taking risks by going dark and upping the intensity of its advertising. And you can do the same.

LEVEL UP YOUR PRODUCT INFORMATION

The best way to reassure cautious consumers is with valuable information. You should make sure that people can find everything they need to make an informed decision. This needs to be on every platform where they encounter your products. That includes third-party marketplaces. Of course, it’s a huge job to make sure every Amazon and Walmart product and search results page has all of the information it needs. If so, you may want to consider hiring an outside e-commerce agency or accelerator to ensure consistency across every available touchpoint. Also, remember that informative doesn’t have to mean boring. Cash App, for example, has used celebrities like Megan Thee Stallion, Max Verstappen, and Kendrick Lamar to bring to life dry concepts like spending plans, cryptocurrency, and the value of compound interest.

CHAMPION YOUR BRAND’S CATEGORY

In tough times, you may need not merely to convince customers why your product is the best. They may need to learn why they need such a product in the first place. That’s why it’s always important to tout the benefits of the entire category that contains your product or service. Health product and nutraceutical companies tend to be exceptionally good at this, often focusing on the overall value of a particular diet or supplement rather than why their version of it is best. In a totally different category, ARAG Legal has been using a series of blog posts and humorous ads that teach people and small businesses alike what legal insurance is and why they need it.

CONNECT TO HOLISTIC BENEFITS

A recent survey found that 70% of consumers define an excellent consumer experience as one that shows a strong relationship with the brand and evokes a feeling of “happiness.” As a result, it’s a good idea to ask yourself what your brand does to make its customers’ lives better. An energy drink might tout its ability to help scattered people concentrate. A sleep app may point to the overall health benefits of getting a good night’s sleep. But whatever you say, you should make sure it aligns strongly with your brand’s values and those of your customers.

POSITION THE BRAND AS A NECESSITY

With “The Rescue,” Apple has positioned its iPhone as not merely a luxury or convenience, but a life-and-death necessity. This was a major effort. To do so, it first innovated to add a satellite cell phone feature and then created an ad with high production values to make the case for it. Yes, not every brand will want to go this dark or has an opportunity to position itself as a lifesaver. But the more you prove the indispensability of your brand, the better.

WHY VALUE MARKETING CAN HELP BRANDS THRIVE IN 2023

The coming year will hopefully not bring as many unwelcome shocks as 2022 and some pleasant surprises. But consumers will remain wary. In such an environment, value marketing may be the best insurance policy brands can achieve. If people are tightening their belts, you need to make sure you’re giving them solid reasons to buy. Great marketing may gain you plenty of eyeballs. But unless you can make a practical case for your product after you grab their attention, it’s unlikely you’ll overcome their rational reluctance to spend their money.