A lot of things matter when it comes to operating a direct-to-consumer business. Logistics, customer service, manufacturing, web design, tech stacks, etc. Last week we talked exclusively about finance (“boring”, but vital!). 

But nothing consumes as much time, attention, and money as marketing. That’s why the recent Meta disruption has caused so much consternation in DTC-land. The Facebook ecosystem soaks up anywhere from 60-70% of digital ad dollars, meaning even minor bumps in the road can have major implications for almost every DTC brand in the world. Risky, no?

So yeah, we’re going to keep talking about Meta. But we’ll also take you through some of your options for diversifying your marketing mix. 

This week:

• More Meta struggles

• Other digital channels to try

• Organic & “the new traditional”

MORE META

The debate continues! Is Meta broken? Might as well dive right in with Barry Hott:

That can’t be right. Meta is stronger? 🤔

• Nothing new, he reminds us. Dynamic Product Ads have been doing this for years. However, he thinks it's happening with more (if not all) ads now. While he lacks proof, he says it’d be interesting to see if the brands suffering the most currently have many copycats or strong competition.

• Meanwhile, Kurt Wagner dropped a Bloomberg article on Meta’s struggles. He reiterated what marketers have been going through: 

• Significant increase in CPM and cost per click (sometimes 2x or 3x)

• ROAS down 20% to 40% for some.

• Attempts to adjust strategies, such as trying new creative content or campaign structures, have largely failed.

Plus some speculation on causes: 

• Some think Temu’s massive spend on the platform could be messing with the way it works. 

• Others think there are bugs on Meta’s side, supported by its two technical problems in the last months.

Barry finishes with a powerful quote from Cody Plofker:

• Either way…

• Taylor Holiday from CommonThreadCo (whose Meta performance has been stable) thinks this Bloomberg article is propagating false and dangerous rumors that could hurt brands. 

Takeaway: Even if one can argue that the algorithm is doing its job, the fact is that many of the biggest brands and advertisers continue to publicly lament a notable drop in performance in Meta this year. 

Alternatives to Meta

As Sean Frank notes, it might be time to test some new channels:

Google is the obvious next, best choice. 

We touched on this a little in our Issue #5: “Wisdom from the experts”, covering what experts say about the following Google options:

• Branded search: not great. Do a holdout test to see if you can drop it. Branded terms in your standard or PMAX campaigns can spike ROAS, but don’t tend to be truly incremental. 

• YouTube: Doesn’t have the obvious last-click attribution metrics of Meta, but is potentially great for brand lift and top-of-funnel awareness due to its huge reach.

• Non-branded PMax: Google’s version of “Advantage Plus”. Some say it’s good at converting middle and bottom-funnel audiences, others maintain it can be effective at TOFU acquisition.  

• Categorical Search & Shopping: Absolutely worth testing. You’ll need to dial in your keyword testing and research here. 

Takeaway: Google and Meta are the two biggest players in DTC digital marketing, but the landscape has begun to evolve over the last few years. The prevailing wisdom has always been to pick one channel (usually Meta) and focus on scaling there until you can on longer gain incremental improvements. However, if Meta continues to be erratic or is no longer profitable, it may be time to go further afield.  

• Which other channels are operators using right now? 

• What are their tactics? 

• Who’s winning?

Here’s what you need to know. 

TikTok

TikTok might be the channel that has gotten the largest increase in spend since Meta’s issues. 

Its most recent DTC success story is Brez. Here’s what their co-founder Aaron Nosbisch said:

Sam Habibi of Try Spotlight notes Brez has seen a meteoric rise on the platform:

How? It’s all about affiliates. 

They shout out Dan Goldstein, a successful affiliate of theirs, who happily shares his creatives here.

What Aaron and Sam mean by spark codes is TikTok’s Spark Ads feature, which allows a brand to turn organic posts into ads (like Meta white labeling or “partner ads”). In this case, those of their affiliates.

• If you’re wondering how to find great affiliates, Ash Melwani from Obvi explains there are two ways.

Ash used to seed (distribute for free) Obvi’s products with creators, waiting to see who genuinely liked it. It took time, but the relationships were good. 

Then, Danil Sulakov and his platform Insense changed things. Insense allows creators/influencers to find you, rather than the other way around. Worth a try, according to Ash.

• Of note, TikTok’s platform referral fee recently rose to 6%, up from 2% + $0.30 per transaction.

As a result, operators are looking for ways to launch affiliate ads without Spark Ads in order to reduce fees. 

• Oh, and if creatives are the issue? Have a look at this:

Nick Shackelford, Brez co-founder, brings our attention to this musician @ero808 on TikTok, who went viral by asking strangers to hold a watermelon and throwing an impromptu dance party. 

• Low budget ✅

• Unique ✅

• Can’t go wrong ✅

• View counts were low until #18 of his series meaning he was consistent and stuck with it ✅

Takeaway: TikTok is an awesome place to try viral-style ads, either via your brand/founder account or through creaters and affiliates. Not every brand is going to catch on with TikTok given the platform’s demographic and unique user interface, however, it might be worth some time and dollars to find out. Just be aware of the (rising) costs of using TikTok Shop. 

X (Twitter) ads

Before Elon Musk, Twitter/X ads’ CPM stood around $3 - $5. After his antics chased away many of the major advertisers, it dropped to $1 - $2. 

This offered an opportunity for those willing to navigate the following:

1. “Rampant” hate speech, disinformation, political culture wars, and violent content

2. The large amount of bots on the platform that may run up your ad views and clicks but not sales.

3. “Piggybacking” - a phenomenon where people use your ad to promote their own products. 

On the other hand, the audience is large and Musk will be highly motivated to improve the advertising platform. Companies of all sizes are reaching massive impressions with very low CPMs on X, but the question remains: how much of it is bots?

Worry not, Chris Orzechowski has a fix. He just sets his audience parameters to this:

• Premium subscribers 

• iOS users

• People in the United States

For ALL of his campaigns. 

Smaller, but higher percentage of qualified audience. 

He shares more tips on how to reach your target audience and which creatives to use in this Buffer article.

Takeaway: X ads will cost you less, but you need to put the work in to make sure you’re reaching your target audience. It will be interesting to see how this channel evolves over time.   

Organic & The New Traditional

Audience building is the new frontier in DTC marketing. Easier said than done, though. Organic growth is often a long, laborious, journey that can net you a loyal and engaged audience but is by no means guaranteed. If it goes south, you can spend a lot of time and money on nothing. 

Plus, we’re all suckers for instant gratification, so most brands don’t do it. In addition, creating highly valuable content that consistently builds an audience is a different skillset than developing ad creative so a lack of expertise can be a barrier. 

• Mini-katana is a brand that can show you how it’s done. They have entirely leaned on organic because they sell actual swords, (which you can’t advertise on Meta). Necessity is the mother of invention, after all. 

• They shot for virality on YouTube, which, back in 2022, was not a popular platform for making DTC sales. 

• In short, and with shorts, they killed it. The key was consistency - 3 to 5 shorts a day, plus one long-form video per week. 

• The result? $1.5 million in sales in 90 days. Two years later, they hit 8 figures. 

Of course, if your product doesn’t lend to virality quite as well, or you don’t want to build an in-house team of creators, there is the option to partner with influencers or simply buy relevant publications. 

• Ridge Wallets has done both. They recently added Youtube star Marques Brownlee as Chief Creative Partner and bought men’s gear publication Everyday Carry in 2022. 

• Tapping into sticky and dedicated digital communities through content and creators - rather than simply advertising with them - could become a key unlock for DTC brands in the near future.  

Takeaway: The question with organic growth is always this - is it worth putting a LOT of work into? To figure this out, consider four things:

1. Virality potential. Brainstorm with others to evaluate campaign ideas, hooks, and angles. 

2. Budget. Low-budget ideas can work and give you more time to generate returns.

3. Rhythm. Can you post at a virality-inducing rhythm for at least a couple of months with no returns?

4. Channel. Make sure you know where your target audience spends time. 

If you can’t build organic growth in-house, can you find a way to marry your brand or product with existing audience networks that isn’t merely advertising at them? 

What’s old is new again…

Direct mail and TV advertising? Isn’t that the realm of legacy, dinosaur brands? Technically these traditional channels are the old frontier, but new entrants are breathing fresh life into them thanks to platforms like PostPilot and Tatari. 

First up, why is direct mail good? So many reasons:

• It has high ROI: Direct mail has a median ROI of 29%, ranking third behind email and social media marketing.

• Good targeting: Tools like USPS's Every Door Direct Mail allow for precise targeting based on location demographics.

• Less competition: With fewer marketers using direct mail, those who do stand out more in the recipients' mailboxes.

• Deeper impressions: Direct mail provides a physical presence that can make a lasting impression, unlike digital ads that may be quickly forgotten.

Take this mail ad by KitKat:

• Undivided attention: Recipients tend to give direct mail more attention compared to digital ads which compete with other online distractions. This makes it better for brand awareness.

• Broad Demographic Reach: Direct mail is effective across all age groups, including older demographics less likely to be online.

• Creative Flexibility: The physical nature of direct mail allows for creative and engaging marketing tactics that stand out.

ADT, a home security brand, left an impression with this somewhat controversial idea:

This contraption could be slipped under your door before popping into a box with the message: “Breaking into your apartment is easier than you think.” 

Not cool (but kind of cool). 

• Multi-Sensory Experience: digital ads stimulate sight and sound at most, but direct mail adds touch, and sometimes even smell and taste. This affects memory-formation.

And last but not least…

• The Romantic Appeal: Direct mail has a nostalgic or romantic appeal that can resonate emotionally with recipients, making it more likely to be valued and saved.

With PostPilot, you don’t have to simply spray and pray when it comes to direct mail. They have built their platform specifically for DTC and ecommerce brands and can help you run everything from prospecting to retargeting and retention campaigns. Think of them like the Klaviyo of irl mail.

Then there’s good ol’ television. Of course, we know that TV is a unique but challenging channel. 

It reaches demographics that spend less time online. It gives brands more credibility. But it’s far from the best when it comes to direct sales since you’re not getting all of that juicy click-through attribution. 

In recent years, TV has turned data-driven thanks to companies like Tatari. This means you can serve ads programmatically and accurately monitor TV spend ROI alongside other channels, opening avenues for direct sales tactics. 

• However, TV’s fortes remain brand awareness and customer retention, which, as many know, is about 5x easier than acquisition. 

• True Classic partnered with Tartari in response to rising CPMs on Meta and other digital channels and saw their CPAs drop. 

• Carly London, head of growth at Lively, a women’s underwear DTC brand, says their TV ads run with Tatari are great at building awareness, with low-cost CPMs. 

Takeaway: The land rush to digital channels like Meta and Google over the years means there are now emerging opportunities in traditional options like direct mail and TV. Especially for those who are willing and able to leverage new platforms that are able to teach the old dogs of advertising some new tricks.

QUICK HITS

• Need some help with your books? Sam Parr made a “Yelp for accountants” called Sam’s List.  It's a 100% free website where he lists 150+ accountants he got in touch with over the last few months.

• Chase Bank has launched Chase Media Solutions, leveraging its massive customer base of 80 million Americans and $1.5 trillion in credit/debit spend to offer highly targeted and personalized advertising solutions. They can also provide clear attribution using first-party transaction data. Definitely worth looking into.

• Prime, Logan Paul and KSI’s drink brand has seen a massive drop in the shelf price of its HYDRATION drink line. After having reached a peak of about £100 a can according to Redditors, consumers can now get one for £0.31. Why? Because much of Prime’s value came from scarcity, but the brand massively increased supply in response to high demand. 

• Ruh-roh, Meta is apparently removing existing customer budget caps in ASC. That means you won’t have control over how much spend goes towards past vs new customers in your Advantage+ campaigns.