Were Publishers the First DTC Brands? How 2 Areas of Marketing Align

DTC brands are hot entities. Practically any consumer product can be translated to a paid subscription business model. As a direct result, circulation and subscription marketing professionals have become very attractive new hires to the growing bevy of direct-to-consumer brands.

DTC brands are hot entities. Practically any consumer product can be translated to a paid subscription business model.

As a direct result, circulation and subscription marketing professionals — a mainstay of the direct marketing discipline for decades — have become very attractive new hires to the growing bevy of direct-to-consumer brands. In reverse, too — publishers are enriching their content offerings for their customers in service to them, acting as DTC brands, themselves.

That was a main thrust at a recent joint meeting of the Direct Marketing Club of New York and The Media and Content Marketing Association. The joint meeting, titled “What DTC Brands and Publishers Can Learn from Each Other in Today’s Subscription Economy,” allowed publishers to exchange ideas with DTC brand reps and others.

DTC brands meeting
Source: DMCNY, Twitter @dmcny | Direct-to-Consumer Brands, Publishers and their Admirers exchange perspectives around customer value and experiences.

“Magazines are the original DTC,” said Mike Schanbacher, director of growth marketing at Quip, a subscription business for toothbrushes and dental care,. He noted that traditional circulation metrics, such as lifetime value and churn rates, very much factor in the business and marketing plans of a subscription commerce company.

Alec Casey, CMO of Trusted Media Brands Inc. (TMBI, which manages 13 brands, among them Reader’s Digest), described how his business continually explores expansion of product and content — to books, book series, music and video — and potentially podcasts and subscriber boxes.

“We are always DTC,” he said, meaning that customers’ interests drive every brand extension in the company.

Data can reveal interesting patterns, he noted. Visitors to Family Handyman digital content is 50% men, 50% women, for example, while print content is dominated by men.

DTC Is High-Speed

One hallmark of the newest DTC brands is velocity.

“When bananas and avocados are sitting in the warehouse beneath you, there’s urgency,” said Tammy Barentson, CMO of Fresh Direct, who previously had had a lengthy career in publishing with Time, Meredith, Hearst, and Conde Nast. Innovations are sought for and tested constantly … and rapidly: “There’s a mindset here … ‘That bombed. What did we learn?’’ ” she said, which is a marked change from her previous publishing posts, where testing was more considered.

Barentson also noted that the Fresh Direct executive team meets every morning to listen in collectively on each department’s dashboard of metrics — and that can inspire action.

“There’s a lot I can learn from operations and customer service data,” she said. “For example, how many deliveries are made per hour might tell me geographies where I might focus more customer acquisition.” Her own team pores through subscription data — who orders groceries one, two or three times a week, or just for special events — “how do we bring them up the food chain?” she quipped.

One of the first publishers to capitalize on digital was Forbes and Forbes.com, said Nina LaFrance, who is Forbes’ lead for consumer marketing and business development. Today, the corporation’s digital sites generate 80 million unique visits per month — but it’s the drill-down on the data that is perhaps the most exciting, enabling Forbes to help advertisers connect with customers across print, digital, programmatic display, brand voice, social channels, live events, apps, webinars, and more. Forbes has its own in-house studio to help brands develop content for marketing across the portfolio.

“We adapt and embrace,” LaFrance said, responding to the all the challenges and opportunities presented to publishers and DTC brands alike — issues, such as coping with “walled gardens,” tech giants, privacy laws, data restrictions and regulations, and the Cookie Apocalypse.

Communities Are Sticky

A common theme expressed by the panel was the desire to create a sense of “membership” and “community” — going beyond the transaction to create “stickiness.” That’s where content development matters. “

At Quib, we try and give a membership feel,” Schanbacher said. “Data is the goal,” noting the better consumer understanding and insights that come from content engagement, data collection, and analysis.

However, not every piece of content translates equally to profit, LaFrance reports.

“Visitors to our home page, or who respond to direct mail, may be more profitable to us than those who link to an article from a social post,” she says — and the ability to measure that customer value across channels is a success, in its own right.

Which is probably the most valuable insight of all. These professionals — DTC brands and publishers — revere how data serves, bolsters, and builds the customer relationship, and they have all pursued a shared culture for measurement, insight, and application to build the brands, build the business, and connect to consumer experience. As subscription commerce grows — it has doubled in the past five years — we know how invaluable such data reverence can be.

DTC Brands — How Data Fluency Enabled a Digital Disruption

My small apartment building’s lobby is a testament to these changing behaviors — there’s barely any room for the incoming DTC brands and related subscription economy shipments, daily. UPS, Amazon, FedEx and USPS — and their contractor networks — are delivering the goods that pile up. No drones just yet.

One of the entrepreneurial wonders of the 21st Century economy is actually not a very new concept at all. Direct-to-the-consumer (DTC) brands have been around since the first mail-order catalogues. Names such as LLBean, Orvis and Lands’ End revolutionized remote selling, as they understood the power of data and measurement in building these enterprises, by earning customer loyalty through superior products and customer service, and generating lifetime value.

So perhaps it’s only natural that in an increasingly digital, social and mobile world where data enables such direct connections more fluidly and products can be personalized at-scale DTC startups would come to be powerful brands in their own right. Bonobos, Casper and hundreds of others are rising to disrupt consumption and create new patterns of consumer behavior for even the most everyday product. Just this week, Rent the Runway officially became the newest unicorn in the venture capital investment world.

My small apartment building’s lobby is a testament to these changing behaviors there’s barely any room for the incoming DTC and related subscription economy shipments, daily. UPS, Amazon, FedEx and USPS  and their contractor networks  are delivering the goods that pile up. No drones just yet.

If You Can’t Beat Them …

Most retailers today report that their biggest threat comes from DTC brands (see Figure 1). Yes, Amazon and private labels also are leading concerns … but the truth is that building a business with seamless data flows enables the customer, and not the product, to be front-and-center. Brands that embrace customer-centricity, and have the customer data directly, cull the benefits.

Figure 1.

DTC brands
Credit: eMarketer, 2019. Used with Permission.

When database marketing and customer relationship management came of age, we knew that pesky problems such as data silos, legacy systems, senior executive buy-in and lack of data bench strength were crippling. Where entrepreneurs love data and have great products and service, those hurdles don’t exist.

No wonder traditional brands are quickly starting up or buying their own DTC brands and relationships. There’s power in data, and having first-party data relationships with consumers even as third-party data, and perhaps a few social influencers, enable discovery and facilitate connection – has brought about the mail-order bonanza of the digital age.

Physical retailers are not powerless in this mix after all, point-of-sale transactions still rule, and hybrids are flourishing (online to offline, buy online pick up in store). It’s how quickly these stores can integrate POS and transaction data with other forms of advertising data, and even serve as data-sharing coops with the brands they carry, to serve customers better. It’s about more relevance and more personalization. We haven’t heard the last roar from Main Street, Big Box and shopping malls. They’ll need to tap data’s power in similar fashion to go back on offense.