The two-day sold out 2018 IAB Direct Brand Summit (DBS) kicked off on October 30 in New York City with a packed house of hundreds of direct-to-consumer (DTC) brand executives, incumbent brand executives, publishers, and platforms, and palpable energy in the room.
Randall Rothenberg, CEO, IAB, encouraged sharing and learning between the disruptor leaders and big brand leaders, as well as the digital platforms, and media attending the event. IAB’s goal is to encourage learning from each other and to emulate success stories. The shift from an indirect to a direct brand economy has been transforming how brands and products are created and sold. IAB first presented those findings about the “Rise of the 21st Century Brand Economy” in February and celebrated founders from 250 DTC brands to watch with the IAB 250, many of whom are in attendance at DBS. And now, we invited brands to learn from each other and from famous disruptors about capabilities and best practices.
Andy Dunn, Founder, Bonobos, talked about his transition from being a disruptor who created better-fitting men’s clothing to transitioning to his current role as SVP of Digital Consumer Brands for Walmart U.S. e-Commerce when Bonobos was acquired in 2017. Micky Onvural, current CEO of Bonobos, took the helm from Dunn as the “Captain of the dinghy,” and has been expanding the business. They both viewed Bonobos’ acquisition by Walmart as an opportunity to grow and scale. And Onvural shared insights about the latest Bonobos campaign set to “evolve the definition of masculinity” and how it is critical to bring consumers into the conversation as well as to embrace and promote joy and pride among employees in order to continue innovating and disrupting.
How can digital direct response marketing drive sales on mass retail shelves? Through creativity and insights from experimentation and measurement, Jesse Horwitz, Co-Founder and Co-CEO, Hubble Contacts, explained how they are working with different channels and partners for their marketing and “watching very closely every channel then probably overreacting a lot,” as they constantly optimize and reallocate budget. He encouraged attendees not to be afraid to test weird ideas, challenge your brand, and see what works.
Throughout the day, Facebook, Google, Hulu, and Pinterest gave tips on how brands can best use their platforms to drive growth, build brands, and better understand consumers:
- Hulu’s SVP and Head of Advertising Sales, Peter Naylor, shared seven best practices to understand today’s digital users – from being marketing led and results driven to measuring what matters to your brand, and how video creates better opportunities for storytelling, above all if you start with connected TV that allows for targeting and acquisition. Naylor also recommended not to forget loyalty building and to give consumers choice and control.
- Google’s Managing Director of Retail, John Nicoletti, explained how to build deep immersive relations with customers with the catalyst for change being the mobile device. As consumers spend more time on mobile screens, their expectations and the way they shop have changed – they are more curious, demanding, and impatient. In this “Age of Assistance,” brands can marry tech, scale, and data insights with their expertise in merchandising and retail to connect in personal ways with consumers, make it easy to drive action, and leverage data and machine learning to accelerate growth and to create magical shopping experiences for consumers wherever, whenever, and however they want.
- Pinterest’s Global Head of Partnerships, Jon Kaplan invited Alex McArthur, Chief Marketing Officer, Purple, to tell his story about creating quality mattresses and leveraging data and storytelling through video content on Pinterest where users are putting together their wish list on what to buy, and how they use family and travel themes of interest as well as music and pets.
- Facebook’s Head of Industry for Emerging Disrupters, Jake Bailey, released the state of disruption annual report, presenting the core tenets of disruptors – unified goals with extreme focus, data democratization, employee and engineer empowerment, becoming a connoisseur of failure by encouraging risk taking, and speed is everything – and how other success factors include building with a mobile-first mentality, embracing fluidity of consumer across Facebook channels, and racing along the DR maturity curve to claim, prove, sell, and scale.
The “godfather of the Direct Brand Movement,” David Bell, President and Co-Founder, Idea Farm Ventures, has been a teacher to many of the founders present at the Direct Brand Summit. He shared some insights about the future of retail and the evolution of location with his BOSS Model as the future of “Go-To-Market,” explaining that it is about Bonding rather than branding, Orators not customers, Showrooms not stores, and Science not service, focusing on transparency, authenticity, and direct relationship with customers. He presented three formats and their acronyms: from the Digitally Native Vertical Brands (DNVB) introduced by Andy Dunn with Bonobos to the Experiential Location-Centric Brands (ELCB), and the Authentic Wholesale-Led Brand (AWLB).
The following six workshops, during the first day, provided insights on best practices for direct-to-consumer strategies and allowed for debates, questions, and exchanges between attendees, founders, and platforms on how to thrive:
- In the “Retail Strategy: The Right Retail Partnerships” Workshop, Mack Weldon’s Founder and CEO, explained how he partnered with Equinox and Nordstrom in a win-win retail relationship and they all shared their priorities while answering questions from Lawrence Ingrassia, author and award-winning journalist, about their retail integration and brand selection process.
- Aaptiv, HelloFresh, and Hulu Marketing Executives provided some insights on how to “Cut to the Chase in Today’s Direct-to-Consumer Ecosystem” as connected TVs reach critical mass. The panel discussed early adopters and the best ways to target different consumer segments.
- Ampush, Curology, MVMT, and Parachute gave their advices on “Media and Acquisitions: Building Your Customer Acquisition Portfolio Model with New Channels” – with examples of their biggest wins ranging from Snapchat to podcast, and national broadcast television.
- Executives from Away, Leesa, SNOWE, and Triangle Capital shared their “Retail Strategy: The Move from Clicks to Bricks,” explaining how to build a consistent brand identity and experience throughout all stores and how to build a destination from pop-up stores to the tactile experiences at physical stores, using those to iterate and build brand awareness.
- The “Media and Acquisitions: Performance vs. Brand” Workshop gathered head marketers from Mizzen+Main, Marketing Architects, Stitch Fix, and Tula who shared how they use the power of influencers, podcasts, and other platforms for multi-touch strategies, and how they measure traffic, conversion, and revenue over time.
- Founders from Bespoke Post, Bombas, Otherland, and Red Antler discussed their storytelling and community building strategies in “Creative Content Strategies: Building Community through Storytelling” and shared various implementation ideas that have worked for their businesses.
Tom Cortese, COO and Co-Founder, Peloton, explained how Peloton is shaping the future of modern brands. They deliver authentic interactive workout experiences directly at home all over the world, merging media, fitness, and tech into something wholly unique. The innovation was to create group fitness classes at home with a remarkable piece of technology: from hardware to software, content and media streaming, ecommerce and logistics, Peloton is dedicated to end-to-end user experience with a vertically integrated approach. Focused and direct, they recognize the value of convenience, authenticity, agility and responsiveness, and that every touchpoint matters.
How Tommy John built a brand with a cult following? Erin Fujimoto and Tom Patterson, Co-Founders of Tommy John, and married entrepreneurs, explained how they embarked on this decade-long journey and how they have grown their business from Tom being frustrated at men’s undershirts and reimagining the fabric, fit, and function of men’s underwear to opening their first store last year, getting investment and endorsement from Kevin Hart, and launching a new women’s line in their 10th year. Patterson said that it feels like “they are making it, not that they made it.” And they keep on developing great products and building a fun, authentic, relatable, and beloved brand.
The first day of the Summit ended with a special Halloween Cocktail Reception sponsored by FuelX.
All attendees had a chance to enter to win the direct-to-consumer products on display @DBS by posting photos and tagging @IAB, #IABDBS and the brand’s social handle as part of “a day in the life of a 21st century consumer.”
The second day of the inaugural IAB Direct Brand Summit started in a similar fashion as the first day with a buzz, breakfast, and a full house, but one distinct difference was the doughnut bar from Simulmedia!
Beyond the delectable food, the conference agenda started with three caffeine-fueled breakout workshops—about Video, Sound, and Instagram:
- In the workshop titled “Video: Moving Disruptor Brands to Television,” Steven Gutentag, Co-Founder & CEO, Keeps, Deepa Miglani, SVP Marketing U.S., Babbel, Shane Pittson, Head of Marketing, Quip, and moderator Dave Morgan, CEO & Founder, Simulmedia, discussed how they approach TV advertising in similar ways as their digital creative with multiple variations, messages, and calls-to-action. They perform rigorous testing to determine what works best. TV creative can be a good business driver if it carries an authentic message (even without the multi-million-dollar ad budgets of some of their more established competitors). Interestingly, the disruptor brands also concurred that they have much more data on their consumers than the agencies or specific TV platforms, and they are looking for partners who can provide tracking and measurement. Otherwise, they can ask their customers where they heard about them and usually get an accurate answer.
- Concurrently, Hernan Lopez, Founder and CEO, Wondery, Marshall Williams, CEO, Ad Results Media, Jared Cluff, CMO, Blue Apron, and Katie Jokipii, Sr Manager, Acquisition & Mass Media, Dollar Shave Club, talked about “Sound: The Rise of Podcasts” and how podcasts fit into a brand’s marketing mix. It is important to find the right podcast partner content-wise to fit with the brand’s strategy and ideals, in addition to the anticipated audience composition. Podcast advertising is both a performance and branding medium. They allow to articulate a variety of details about products through host reads. So, make a dedicated effort to get to know the podcast host and to ensure they have first-hand experience with your product to share that experience in the most authentic way possible and ensure there is a call-to-action in every read. There is no perfect way to set up the attribution model for podcasts, but you can triangulate different methods to see what works.
- With the Instagram Story School, brands learned some tips and tricks on how to use Instagram Stories to tell compelling stories and to capture users’ attention, leveraging the various creative tools from filters to stickers, and more advanced features such as boomerang, drawing, polling, and motion pinning, to name just a few. Jean Feroldi, Designer, and Brittany Johns, Creative Strategist, from Facebook, provided hands on practice to all the brands in attendance and the ability to apply and test their own cool effects on their Instagram stories. Did you know that you could apply a rewind effect or slow motion, use props or erase/reveal elements directly from your Instagram app onto your stories’ photos and videos?
What are Direct Brands? How do they behave? How do they sell? IAB’s CEO, Randall Rothenberg, and Mark Shmulik, McKinsey & Company, revealed findings from IAB’s inaugural Direct Brands 2018 Founders’ Insights, based on research collected across a benchmarking survey, round table discussion, and one-on-one interviews with founders. They shared some key findings: Direct brands are born to disrupt: 97% of respondents listed “category disruption” as their goal. It often starts with someone who does not like the experience then wants to do it better… You can get both value and premium with direct brands. They are in every aisle, above all health, wellness, beauty, fashion, and food & beverage. Direct brands are not tech-led, they are marketing-led. They are fast to launch products (4 to 7 months on average). Servicing customers is in their DNA. And they are selling products… not always subscriptions (only one third of respondents). Over half said that they do not use agencies and DIY. They love Facebook… but it’s complicated. They are also testing other marketing channels. Their own web channel is core to their retail strategy: E-commerce is dead… long live omnichannel! And Amazon is not a ‘frenemy’, it’s just another channel. We are keeping the survey open and encourage more direct brands to participate: www.iab.com/db/founders-survey. We will be sharing back the results.
In 2019, IAB will also release its IAB 250 brands to watch (2.0) at our IAB Annual Leadership Meeting and both a Direct Brands Consumer Study and Direct Brands Market Study are in the plans for next year, along with Partners’ Direct Brands Days and Direct Brands at Cannes. Rothenberg invited more direct brands to join.
Next, Tina Sharkey, CEO and Co-Founder, Brandless, talked about reimagining what it means to be a brand. Companies like Brandless are creating new types of authentic relationships with customers that are better suited to today’s shifting consumer habits. The audience is changing: 75% of Americans are more likely to buy from brands that contribute positively to society and 77% of millennials don’t want the brands their parents used. 90 of the top 100 U.S. leading household goods brands lost market share last year. Brandless is on a mission to better everything for everyone. First, they always start with truth, trust, and transparency: be transparent with the consumer and engage in a two-way conversation. Brandless’ labeling system lets products speak for themselves, using their simple product name in a white box and showing clearly all attributes, origins, and certifications (e.g. USDA certified organic). Brandless is building a community based on shared affinity and co-creating content: they identify community leaders such as yoga teachers, moms’ groups, vegans, nutritionists, etc. By producing high-quality, extremely valued products at simple and fair prices then they can let the community tell their story, test, and learn to create the next wave of products with people who want to join the movement.
What is the “Shopify Effect”? In a hyper-competitive retail environment, shoppers are looking for more choice and a deeper relationship with brands. Shopify’s CMO, Jeff Weiser, provided some insights about how direct-to-consumer selling is working to bridge this gap with new technologies, partnerships, and sales channels. Shopify is designed to be a merchant’s home base that handles shipping, inventory and data management on one platform, covering every channel on any device, so that brands can focus on their core business, marketing, and customer service. “We create technology for merchants to create whatever they want, wherever they want,” said Weiser. And they are creating a community of makers and creators that is growing.
In the last main stage session of the Summit, titled “Frontiers of Disrupter Brand Finance,” executives from venture capital (Greycroft), corporate venture funds (P&G Ventures), and private equity (Bain Capital) forecasted the trends for existing direct brands looking to scale their businesses as well as the pitfalls and opportunities for incumbent category leaders looking to acquire market share and capabilities through acquisitions, and startups looking to seed fertile territory. P&G Venture focuses on fast moving consumer goods and early stage pre-seed. Greycroft VC can invest from the launch or post launch, whereas private equity Bain Capital would focus on scale once brands have past the early stages of development. In terms of acquisitions and partnerships, they advise brands to make sure that they agree on the vision of the future and to review their alignment in terms of strategic roadmap, governance, and talent before signing.
The three afternoon workshops were the last sessions of the day, covering diverse topics to provide more inspiring and educational stories, and insights on what’s next:
- In the next workshop about “Creative Content Strategies: The Impact of Design on Creative Storytelling,” direct brands shared their strategies to personalize and address their customers’ needs and how to leverage the cultural influences and relevance to engage consumers. Melissa Duren Conner, Partner and Managing Director, Jennifer Bett Communications, Brian Smith, Chief Wine Officer and Co-Founder, Winc, Poppy Thorpe, Head of Brand Marketing and Strategy, Glossier, and Anu Verna, Head of Marketing, Care/of, talked about listening, connecting and sharing user-generated stories to help build trust and grow your community around experiential moments and authenticity. “Encourage authentic content and curate it,” said Thorpe from Glossier, “using customers’ stories and content in our performance channels can bring new customers into the conversation.”
- What can your video really say in six seconds? It’s not about the format, it’s about what is best for your brand and what works. Eric John, Deputy Director, Video, IAB, moderated a panel with Liza Moiseeva, Co-Founder, Globeln, Yoav Naveh, SVP People Operations, Taboola, and CEO, ConvertMedia, and Shane Smith, Senior Director of Digital Marketing, HomeChef, to discuss how brands can experiment with a variety of video formats and lengths. Social is about engagement and entertainment: Instagram photos and videos are more gorgeous, while it can be less perfect for Facebook and Twitter. Learn what format works best for your brand and adapt. For instance, Facebook Live is longer than six seconds but converts to sales for Moiseeva. Brand marketers can use powerful digital video content to incorporate creativity, drive engagement with loyal audiences, and measure the success of their respective KPIs.
- Consumer privacy, brand safety, and data transparency were the topics for the workshop with Laura Lisowski Cox, Co-Founder and CMO, Oars + Alps – a digitally native brand, creating simple and natural men’s skin care products. She talked with Jamie O’Donnell, Director, Membership & Operations, TAG, and Brendan Riordan-Butterworth, Senior Director, Product, IAB Tech Lab about the tactics and tools to reduce spend on fraudulent inventory and how to protect her brand while building a campaign. TAG’s Certified against fraud and the authorized digital seller lists (ads.txt) can help both publishers and brands drive more transparency. Strategies for discovering and reaching audiences are also being affected by privacy-related changes such as GDPR (General Data Protection Regulation) in Europe and the California Consumer Privacy Act (CCPA). Yet, the GDPR transparency and consent framework developed by IAB Tech Lab, along with the new DataLabel.org site can help.
Rothenberg thanked all DBS participants for their expertise, knowledge, and willingness to share. The Direct Brand Summit attendees then gathered to enjoy the last networking lunch before heading out to celebrate Halloween.