Is “Direct-To-Consumer” A Bad Word?

The term “direct-to-consumer marketing” once conjured pictures of direct mail, billboards and late-night infomercials. Fast forward to today, where disruptor brands have found a match with “DTC,” approaching the tired model in new, fresh ways.

Still, the term “direct-to-consumer marketing,” has a dubious past and it’s one that can be difficult to shake off. So who’s excited to be part of the direct-to-consumer renaissance, and what’s the verdict on the loaded term?

From Unsavory To Sophisticated

Cheesy infomercials with actors hawking products that would quickly break upon arrival (no COD) used to rule the world of direct-to-consumer marketing. For decades, top-tier brands stayed far away from the term DTC. Today, the model has shifted from infomercials to Instagram posts and personalized podcast ads in place of commercial breaks. John Harrobin, CMO of audiobook app Audible, says the DTC landscape has changed and has evolved beyond its unsavory roots. He doesn’t mind being associated with the term, citing the shift to digital as a primary driver of the DTC revolution and, in essence, its own rebranding. “Sure, [there are negative connotations] if people think of DTC as Ginsu knife infomercials circa 1980,” Harrobin said with a laugh. DTC has proven to be a driver of innovation because it starts with an empathetic mindset–what are the needs of the customers, what are their current pain points–and building solutions that address those needs without being encumbered by legacy business models.

“DTC has proven to be a driver of innovation because it starts with an empathetic mindset–what are the needs of the customers, what are their current pain points– and building solutions that address those needs without being encumbered by legacy business models”

“I think premium digital services have changed what direct-to-consumer means.

Suzanne Grimes, president of Westwood One and executive vice president of corporate marketing at Cumulus Media, talked about the evolution of DTC marketing from its unsavory history to a sophisticated approach that today’s disruptor brands have been eager to adopt.

“In my early days in media, DTC meant something that was very bottom of the barrel, unsophisticated marketing,” Grimes said. “It was unsavory brands looking to reach consumers, considered the lowest tier of marketers, whether right or wrong. Today it’s the polar opposite—those DTC brands are seen as real innovators doing what more traditional companies are looking to do, as well. It’s fascinating how the paradigm has shifted.”

The paradigm is shifting not just for disruptor brands, Grimes said, but also for traditional powerhouse brands that only recently would not have considered including DTC in their marketing spend.

A recent report from IAB pointed out the growing changes in the DTC market and its effects on both emerging and established brands. Gillette, for example, still the leading razor provider in the U.S., is losing its share of the market to disruptor brands that rely on DTC marketing.

According to the IAB report, Gillette’s share of the men’s razor market fell from 70 percent in 2010 to 54 percent in 2016. Much of that loss is attributed to emerging competitors such as DollarShaveClub and Harry’s, both online razor companies that rely heavily on DTC to reach consumers.

Combined, those two brands increased their share of the market from 7.2 percent in 2015 to 12.2 percent in 2016.

Grimes said that, in opposition to years past when traditional advertisers stayed far away from the DTC approach, major brands are now asking themselves whether they should jump on the DTC train. Traditional brands, she said, are working to find a place in the rapidly growing DTC field, where startups and disruptor brands rule.

“It’s fascinating how the paradigm has shifted”

“At what point will brand advertisers—old fashioned brands—find that that context, that medium and environment will be effective for them and enter the DTC market?” Grimes said. “I suspect that’s coming fairly soon.”

Even for startup companies, where the DTC space provides a world of opportunities to reach new consumers, some do have some trouble with the “direct-to-consumer” term. However, the trouble isn’t that it’s associated with a low-brow past. Rather, it’s because DTC has gone from a marketing category to a category of companies altogether, even if DTC is one of the only things a group of brands have in common.

Ben Witte, Founder & CEO of Recess, a beverage company that sells canned CBD-infused sparkling water, doesn’t mind the term being applied to the way Recess markets itself to consumers. However, he says that the term can be limiting as Recess is pigeonholed with other DTC brands.

“I like the term ‘direct-to-consumer marketing,’” Witte said, “But sometimes we get lumped into these companies like Away and Warby Parker that only sell through their own retail channel, when we have an omnichannel approach.”

In that way, Witte said, the perceptions around the DTC label can sometimes be restrictive. However, Witte has a different idea of what “direct-to-consumer” means to him and his brand, a far cry from its humble beginnings.

“Direct-to-consumer is about having a conversation with our community that enables and omnichannel distribution strategy,” Witte said. “The distinction between us and many other brands is that the Instagram is of equal importance as the drink itself. These things work together.”

He’s fully engaged with the DTC model, interacting directly with consumers largely through social media, and says that, with DTC at the center of Recess’ marketing model, they “haven’t spent a dollar on outside advertising.”

“Direct-to-consumer is about having a conversation with our community that enables and omnichannel distribution strategy”

Harrobin, who has embraced both the DTC model and the term at Audible, predicts DTC will become even more personalized in the future. That personalization is easy to adopt in the world of DTC, smoothly changing and tweaking campaigns as podcast hosts ad lib for companies and social media marketers create new posts each day.

“I’d bet on more one-to-one interactions between brands and customers that will lead to better understanding of customers and companies better able to provide a valuable experience,” Harrobin said. “More conversations and deeper engagement through omnichannel strategies that will strengthen relationships with customers.” As more brands move into the DTC space, the term “direct-to-consumer marketing” is shedding its former reputation. Disruptor brands are leaning into the term, forecasting DTC as central to the future of brand marketing.

“[DTC] is content, commerce, experience all working together,” Witte said. “I think that’s the future.”