The rise in content-powered brands
The other week, Mobile Fix founder, digital guru and friend of VIDA, Simon Andrews, shared his concept of Bonsai Brands. As Simon says…
“The factors that enabled big brands to get really big just don’t apply in the GAFA (Google, Apple, Facebook and Amazon) age.
Scarcity of distribution was essential to the success of the brands owned by P&G, J&J and Unilever etc.
…these big brands were never actually consumer brands - they were essentially B2B brands selling to the big retailers, with a promise to spend heavily on advertising.
Infinite shelf space demolishes this strategy; Amazon and Shopify let you reach anyone and everyone and there is no gatekeeper…
So we think that many of these brands are going to be super healthy businesses. But they wont grow like the brands that went before them.
They are Bonsai Brands. And if you accept that, they are great businesses”
We couldn’t agree more with Simon’s hypothesis. DTC brands are grown in a different way, especially when it comes to marketing communications.
The comms strategies of brand giants - many of which were grown in the 20th century - are analogous to industrial agriculture. They use mass production and harvesting techniques to broadcast, then performance media to enable them to reach increasingly targeted audiences at scale.
And yet, as the IAB’s latest report on DTC brands shows, these big established brands with massive marketing budgets are being successfully challenged by DTC startups that do things differently.
If that’s the case, why then, as last year’s IAB report put it, are these upstart startup businesses able to ‘nibble to death’ the behemoths?
We see a parallel with the rise of organic and biodynamic farming, clean eating, veganism, etc. Consumers with the luxury of choice and the means to do so prefer to buy the things that make them feel good; brands that are ‘for’ them, that make them feel as though they are ‘doing their bit’.
The comms strategies of DTC brands are inherently different to the big beasts. Marketing budgets based on successive funding rounds do not often support high-spending campaigns built on the veneer of artifice that high volume, mass, intrusive marketing communications bring. DTC brands are, therefore, more naturally associated with the rich stories and deep engagement that high-relevance content brings.
A good example of this is Glossier, which has successfully entered the multi-billion dollar beauty industry; taking on the established giants with a fraction of their marketing investment. And they’ve done it by giving people the confidence to buy beauty products without trying them first.
To do this, founder Emily Weiss talks about creating a ‘social-selling’ website for beauty. Speaking to Bloomberg news last year, she said:
“The customer experience is pretty broken.”
To search online, women must still primarily navigate a rabbit hole of reviews.
“In many ways, we are placing women’s search in the land of 15 tabs on the internet.”
So, by creating products and content to meet the specific needs of identified segments in the online beauty shoppers’ world (in addition to the celebrity endorsement and beautiful packaging), Glossier has found a competitive advantage in content.
This also goes to show that, in the ages of infinite choice and the lottery of peer to peer reviews, there’s still a role for curation.
As Simon says, there are hundreds of new DTC brands emerging all the time. Budding independent media and creator-led content businesses, like Muddy Stilettos (The Urban Guide to the Countryside), and women’s cycling brand and Vida portfolio company, Casquette, demonstrate how creating content that helps people to discover, try – and buy – forms the new wave of DTC brands.
And there’s now even a dedicated DTC review media brand - ThingTesting- for the DTC-curious.
ThingTesting is going from strength-to-strength on Instagram.