DIRECT TO CONSUMER (DTC) BRANDS: HOW IS MARKETING CHANGING AS THEY GROW?

Direct to consumer (DTC) brands are springing up all over the place - Emma, Horizn Studios, Kess and Jungglück are just some of the names of German DTC brands. DTC companies are all about the direct relationship with the consumer. All areas of the company, such as development, production, marketing and sales, are orientated towards the customer and not towards retailers or other intermediary business partners.

Advantages in the growth phase

A decisive advantage for marketing is that brands have access to valuable first-party data. This is extremely valuable in times of increasing data protection legitimisation. The close customer relationship makes it possible to react quickly to changes in demand and offers many flexible pricing options.

During the launch and growth phase, direct contact via the company's own digital channels (social media, blogs, podcasts, etc.) is efficient, enabling a dialogue with customers as well as the dissemination of content by them. The focus on market niches enables cost-effective implementation. In addition, the use of digital performance marketing measures pays off with a high ROI.

New customer groups, new marketing channels

As soon as DTC newcomers have reached a certain growth phase, however, the marketing mix must change. Because with growth and the arrival of competitors, the company's own channels are no longer sufficient. These would only reach a small proportion of the potential customer base, while at the same time the costs multiply - customer acquisition costs increase rapidly. This is usually accompanied by a shift to the top of the funnel.

The approach and acquisition of new customers must grow more strongly and requires a switch to channels with greater reach and engagement. Brand development must be actively driven forward.

Branding meets performance through video on demand advertising

Video campaigns are very suitable for expanding target groups. They are among the most user-centred and are a popular tool in the awareness sector. The click-through rates for on-demand advertising in particular, i.e. self-determined advertising consumption, are above average, meaning that performance is combined with a high level of engagement and branding (there are several business cases on our blog, e.g. Mobile.de, s.Oliver, etc.

The possibility of addressing users in the advertising selection not only via the product or brand, but above all via the product category, leads to new customer groups being addressed with advertising messages. Self-determined advertising extends the DTC approach into high-reach advertising communication: user-centricity first!