In the dynamic world of retail, Direct-to-Consumer (DTC) brands have been making significant strides in their advertising strategies. With a shift towards digital platforms, these brands are investing heavily in social media and influencer marketing to reach their target audience. This article explores where DTC brands are channeling their ad dollars and how this is shaping the future of retail advertising.
In recent years, DTC brands have been allocating a substantial portion of their advertising budget to social media platforms. However, the landscape of social media advertising is not static. Brands like Birdies, once heavily reliant on Facebook, have started diversifying their media mix. In 2022, Birdies reduced its Facebook ad spending from 66% to 52%, while increasing its investment in linear television ads to 22%. This strategic shift underscores the need for brands to distribute their ad dollars across various platforms to avoid over-reliance on a single channel.
View this post on Instagram
While social media continues to be a dominant force in DTC advertising, influencer marketing has emerged as a powerful tool for brands to extend their reach. Influencer marketing leverages the credibility of popular content creators to promote a brand through paid endorsements, affiliate programs and recommendations. According to CivicScience, about two-thirds of retailers claim to use influencer marketing, collaborating with brand advocates, micro-influencers, and celebrities to increase their brand’s reach and acquire new customers.
View this post on Instagram
Despite this shift in paid advertising, influencer marketing remains a crucial part of many DTC brands' advertising strategies such as with DTC brands like Bushbalm and Droplette. It's important that such brands select influencers who share content regularly, have an engaged following that aligns with the brand’s target audience, and fit the brand’s image. Moreover, brands should avoid common mistakes such as focusing solely on follower counts or choosing influencers based on low rates. Instead, they should prioritize audience engagement and give influencers creative freedom to produce content that resonates with their audience.
View this post on Instagram
The future of retail advertising lies in this adaptability, with brands that can successfully leverage both social media and influencer marketing poised to thrive in the digital age. DTC brands are navigating a complex advertising landscape, balancing their ad spend between social media platforms and influencer marketing. We reached out to industry experts for their opinions on how DTC brands should approach retail advertising in an era of influencers, sponsored ads, user-generated content and social media marketing.
Where should DTC beauty and fashion brands be spending their ad dollars?
"In 2023, DTC beauty and fashion brands need to invest in omnichannel marketing and their ad spend needs to adjust to that type of marketing as well. On average, consumers in North America use upwards of 14 devices, so being able to redirect on multiple channels while also making it all about the consumer experience is essential. So your regular ad channels on social media need to be utilized, website advertising, blogs, and email & SMS marketing are essential." said Danielle Fitzpatrick Clark, CEO & Founder at Influence Builder.
"Social media is great for brand awareness. Obviously brands should be spending on Google as well, but with a mix of organic and paid on social media it can be a quick path to success. For DTC brands, the channels with the best returns right now are TikTok, Pinterest, and Meta. The key is the creative - that is the most important element here," said Anna Sullivan, Founder & CEO at The Creative Exchange. "When it comes to Meta, it’s very popular to run partnership/white-label ads with influencers in order to help put your brand name out there with a recognizable face. However, Gen-Z is not as keen to that, so be aware of who you are targeting when making these decisions. Otherwise, a large portion of ads are UGC, which my agency uses for about 70% of all ad creative."
Quỳnh Mai, CEO & Founder at Qulture, suggests that DTC brands scaled pre-Covid because targeted ads online worked however now that cookies are no longer an option or as effective on Apple IoS, leaders are struggling to engage with their users. "DTC brands now have to do the hard work of brand building through breakthrough product, word-of-mouth / organic media (powered by influencers), event marketing and celebrity product placement."
What are some of the best ways to market products with influencers today?
"You really want to lean into who your influencer is, and their organic content style. Previously we saw too many brands hand influencers scripts and very particular briefs. People are ok to be advertised to, but they do not want an ad - they want to feel they are getting a genuine content piece from the brand. So when working with influencers, approach not only people who have a decent following, but who actually will fit the style of content your followers are looking for," said Sullivan. "Another style we are seeing right now is a more comedic approach - this creator has done a great job at incorporating brands into his content - you can tell it’s a paid partnership but the content still has legs of it’s own."
@italianbach Nice and subtle @airup ad #airup #airupuk #fyp #viral #xyzbca ♬ original sound - ItalianBach
Mai added, "For fashion and beauty brands, its important to “reverse engineer” its influencer content and find communities online where their products resonate. For example, jump on the goth trend and show how your platform shoes work for #CyberGoth (151m views on TikTok)."
What type of influencers are best for DTC brands work with?
:Brands want to choose influencers that are going to become a user of the product and give real insight and testimonial to the product. That makes a more authentic share and creative for social media which consumers happily believe. At the start of 2023, there was a growing trend of de-influencing brands, that had brands running away from influencers who were using de-influencing as a way to build their own platforms and go viral, said Danielle Fitzpatrick Clark, CEO & Founder at Influence Builder.
"With all this going on, here's what I tell brands. You don't necessarily want the biggest influencer star in your influencer marketing campaigns, you want influencers who want to partner with the brand and have more authentic creative. If a brand is just starting out with influencer marketing nano and micro-influencers that partner with you are the way to go," said Clark.
Is long-form video content or short-form video content best for DTC brands?
"There is no right or wrong, however it’s safe to say more short-form video content is being produced right now. If you look back, Instagram, Snapchat, and TikTok had much shorter time spans, and now all channels have expanded to allowing much longer content. Then we look at Youtube - creators who adapted to long-form and were able to cut that into shorter videos are winning (Mr. Beast is a great example of this). There are several AI tools today that take long-form videos and cut them into relevant clips for you," said Anna Sullivan, Founder & CEO at The Creative Exchange.
"My take is that photos have been easy for everyone for years, but video was more intimidating for the everyday person to create. That is why Vine was successful - super short clips with no editing, and now we have evolved - TikTok was a major player in this introducing in-app editing tools and the current state of their Creative Center is better than what Meta has ever offered. I think creating long-form videos you have to know how to captivate your audience every few seconds to have them continue watching - and what a lot of brands have a hard time doing is creating content that feels relevant (consistently) and captivating for such a length," said Sullivan.
Danielle Fitzpatrick Clark, CEO & Founder at Influence Builder suggests that there is a shift going on with video content and two phases in the omnichannel marketing approach with influencers:
"It depends on how much pre-education a brand needs to give to a consumer, especially if they are not a household name, [a DTC brand] will require longer-form video. Long-form as you're in discovery and pre-education with consumers and then short-form later on the omnichannel marketing when a consumer has shown interest and received the pre-education."
Quỳnh Mai, CEO & Founder at Qulture added, "Long-form or short form depends on the content itself, but it’s important that every second you expect the viewer to watch is engaging and meaningful. Tutorials or reviews can be longer, but entertainment or humor tend to be better as short form video."
While, Alessandra Angelini, Founder CEO at Influur says that older audiences still engage more with long-form content.
"It truly all depends on the brand's target audience, the product that is being advertised, and what user stage the product will be advertised on. The beauty industry has a spectrum of audiences varying in gender, age, and ethnicity. Although it is true that short format videos are having more engagement right now, older audiences tend to engage more with in-depth long formatting," said Angelini. "Also, the product would dictate if it needs a longer format for the review to fit all the information needed or not. Some companies might want to use both formats. Short formatting pushes the user to buy the product and long formatting encourages and teaches the buyer to use the product."
If a DTC brand had to choose between making a Youtube video (in-depth) vs. making a short reel video, which one would have the better ROI (for ads)?
"It just depends on the brand and the consumer. It's more important to understand the consumers buying behaviors than to throw money at ad spend and at influencers and hope that it turns into an ROI. If a brand doesn't do that upfront, then no matter who they get for an influencer, the ROI won't be what it can be." said Clark. "Before a brand just throws money at ads, I highly, highly recommend they spend some of that ad money on discovery of their ideal buyers online behaviors and then utilizing high converting creative within those ad platforms."
Sullivan adds that anyone willing to watch longer form content will have a higher ROI than shorter content:
"I think it’s safe to say that anyone who watched a full 10 minute video on a brand vs a whole 20 second clip will have a higher ROI - assuming that video was able to give more details - the consumer will be more educated and most likely feel more ready to make a purchase decisions. The great thing about short-form though is that (on TikTok) the algorithm is so great, the right 20 second clip (of the part of the review that may matter more to the consumer) will come up on their FYP." said Sullivan. "In my opinion, planning for long form video with a goal of every 3-5 seconds keeping you plugged in and knowing how to chop that into shorter clips is key and will be the best thing your brand can create - with or without an influencer."
Quỳnh Mai suggests that media spend plays a role in determining the ROI of a video and not just measuring views on their own.
"Video views is a hard barometer, because it would depend on marketing and media spend on a video. However, to see if a video itself is effective, looking at view through rate is a great measurement. If the content is engaging, and viewers watch a majority of the content, brands will know that it's engaging or informational and then the next step would be to put paid media dollars behind it to get more eyeballs," said Mai.
