DTC or D2C advertising, was first used in the US in 1981. It refers to a strategy in which a company sells products or services directly to consumers, without an intermediary.
Over the past 40 years DTC strategies have evolved and adapted to new technology. In a 2019 survey conducted by CommerceNext, over 75% of D2C digital retailers indicated that their ecommerce budgets were higher than the previous year’s. D2C ecommerce sales in 2019 reached $14.28 billion in the US, and are expected to grow by 24.3% this year to $17.75. A report by Yotpo on the “State of D2C Marketing” in 2019 states that spend has increased in 2019 vs 2018 on Facebook, Instagram, and Google ads, and that brands are investing in experiences that foster confidence, community, and connection to the brand.
Voice marketing is growing as a prevalent part of D2C strategies, with over 118 million smart speakers in US homes representing a 78% year-over-year growth. If you haven’t yet jumped on the DTC bandwagon or if you just want to up your game here are some fundamentals you should consider implementing.
3 Main Types of D2C Advertising
There are three main types of DTC or D2C advertising:
- Product claim ads: These name a product and summarize its benefits. This is the most common type of DTC advertising.
- Reminder ads: While these typically name a product and provide information features, they don’t make any new claims about it.
- Help-seeking ads: These don’t usually name a product but feature information about the problem or need it addresses.
No matter which type of DTC advertisement is being used – and for which industry – their overall goal is to inform or remind consumers about a product or service and their need for it. In general, DTC advertising is used in print, TV, radio, social media, and other forms of media.
The Fundamentals: Why DTC Advertising Is Used
First and foremost, DTC advertising is meant to increase sales and profits. This can’t be done without creating a great and memorable experience for consumers at the other end of the ad. There are a few key tips to keep in mind in order to achieve this:
- Boost awareness about the problems that your product solves
Your aim should be to increase awareness for your brand and your products with your target audience. Understand how much you need to educate your audience. Do they know they even have this problem that you solve? Is your type of solution or product a common thing they will likely look for or do you need to guide them through discovering it? Knowing these things will help you create better content and ads that provide your audience with information that not only helps them understand what you’re offering, but also encourages them to take action.
- Help your target audience make a choice
There are two main choices you need to guide your audience through – they need to decide if it’s something they need, and if it’s better than other options out there. Tailor your messaging to match your target personas, and provide them with the information they need to choose you over your competitors.
- Engage beyond the sell
Motivate your audience to establish contact and create a relationship with you that’s based on trust, openness, and the exchanges of mutual services. Let customers know that you care and listen to their concerns, and that they’re part of a community.
- Be truthful and accurate; don’t be misleading
Any information you provide when communicating with potential consumers through advertisements should always be accurate and truthful; it should never be misleading. Hence, it is critical for your business to partner with the right advertising agencies (or the right in-house advertising person) to guarantee that none of the information communicated is erroneous, leaves out critical details, or contains double meanings. That being said, your goal is to make a sale so don’t be afraid to use “salesy” or marketing-oriented content and ads. A good ad is measured by its success in providing balance between accuracy and salesmanship. That, and of course the ROI, which relies on CTR, conversion rates, and cost per acquisition.
- Make claims that are backed up by evidence
Wherever possible, back up your claims with proof. Show before and after images, pictures of real people using your products, video testimonials, quotes, and even statistics where relevant.
- Convey a balance between benefits and risks
No product or service comes without risk. While it’s critical to market the benefits of your product/service to potential consumers, it’s just as important to inform them of any possible risks associated with its purchase, consumption or distribution. This is especially true with products or services that are health-related, though it can also apply to products and services in other categories (e.g., electronic appliances). Make sure to include information about what the product/service is, who can use it, and when.
3 Marketing Tips for DTC Success
If you’re a marketer planning to use DTC ads in the future, here are few tips to consider:
1. Embrace and expand branding efforts
For companies that rely on DTC advertising, you’ll need to increase your overall branding efforts.
This is because markets are becoming overcrowded with advertisements, while the cost per action (CPA) keeps rising. Outbidding the competition will no longer suffice. This is especially true for small and mid-size brands.
The thing to consider with DTC is that you don’t have another brand to rely on so you must build your own.
2. Divide your focus between the tried and the new
As we all know, Google and Facebook are here to stay. While the average cost-per-acquisition will likely increase, PPC campaigns still offer powerful targeting tools that will help you reach your target customer. The good news is that smaller players can still compete by finding smaller niches that the larger companies can’t target. Small companies can make specific offers to a very specific subset of people, which large brands can’t do.
For medium and large brands, it would be savvy to get on new, potential channels quickly, especially as new social media platforms and consumer marketing channels are emerging at an increasingly fast pace. While it’s a challenge to know which one will turn into “the next big thing”, there are channels which are clearly growing and are going to be “must-have” channels in the near future. Bring customers to channels you control.
Email can be an influential channel for direct-to-consumer marketing efforts, because you can easily and fully control it. A well-maintained email list can be a valuable asset to any business, as it provides the means to start and nurture direct connection to consumers. Another option, Facebook Messenger marketing and chatbots, offers less control but higher potential for click-through rates (as much as 88% open rates as well as 56% CTRs).
There is also SMS marketing, which promises impressive results: it earned 592% higher order rates than email. The best approach to boost engagement rate and sales is to combine your marketing channels.
3. Create the right presence
Your brand presence is critical to increase sales. This includes your website and online presence on social media networks. For the past decade, having a mobile site has been just as important, and these days is a must to ensure your consumers can find you online.
Just like mobile, “voice” is catching on very quickly and is expected to quickly be a must-have in your brand presence. The voice channel enables consumers to search for, access, and purchase from brands using voice-activated devices like Alexa, Google Assistant, and Siri. Creating a voice presence, or voice shop, opens you up to a whole new group of consumers, provides your existing buyers with a better buying experience, increases return sales, and keeps you one step ahead of your competition as you get on the wave before everyone does.
Whatever type of DTC advertising suits your marketing needs, be sure to keep in mind – and follow – the fundamentals behind it, as well as future trends, to get the most benefit out of it.