Sea bass, car crashes, and static ads

A look at new DTC opportunities and classic advertising fundamentals

Author

The DTC Times
October 13th, 2024

How to balance the classic and the fundamental with the new and the cutting edge… 

That seems to be the struggle in modern digital advertising a lot of the time. 

The industry changes so often that you might need someone on staff just to keep their ear to the ground -

The next Meta algo update, the current state of AI tools, the latest video editing tech, what’s happening with TikTok, how incremental is Google-branded search again?...

The days of banner ad CPMs being a key KPI are over. Some things are better left in the dust. 

But sometimes it makes sense to revisit the things that worked in the past. Sometimes these are things that continue to work because they operate at the primary, first-principles level.

We’re going to talk about the new and classic today:

  • AppLovin’s unexpected resurgence ← why eCom marketers should pay attention

  • New tool profile: Address Guard ← Protect yourself from hidden shipping costs

  • Static ad strategies from industry experts ← How to up your statics game

  • Liquid Death’s latest product launch ← Object lesson in why copy and messaging matters 

  • Quick Hits ← Find your new, FREE customer service platform here 

Let’s get into it…

The AppLovin story (and why DTC brands should care)

AppLovin Corporation, principally an in-app mobile ads platform, has seen its stock valuation increase 650% over the past two years. 

They’ve released industry reports describing higher levels of loyalty for customers acquired through in-app ads, and significant improvements to their algorithm dating back to 2022 are the main drivers behind their success. 

People in DTC are taking notice: 

Let’s answer his (and your) questions. 

Here’s the deal. 

No, AppLovin is not Chinese. 

It was founded in 2012 in Palo Alto, California, as other major mobile ad platforms like AdMob and Millennial Media began to take off. 

If you remember mobile ads in the past, especially those in games, they were pretty annoying. Big, in-your-face, hard to reach the skip button, likely to replay twice, etc. 

That was AppLovin. 

Say what you will, they generated clicks…mostly from people fat-fingering the skip button. 

However, they came out of stealth in 2014, raised $4 million, and did well with “rewarded video ads”, which let users get in-app stuff for watching a video ad. 

Since then, they’ve been a mainstay in mobile game ads. 

In 2018, they went on a buying spree, investing about $1 billion in mobile game publishers and studios over the next two years. 

That, along with the pandemic boom in mobile game popularity, saw Applovin do well - after which their stock plummeted. 

So, why is it blowing up again?

When they hit their peak in 2022, their major source of revenue was from the near-200 apps in their portfolio. Their ad platform came in second. 

As their stock fell, they worked on releasing a new algorithm, which hit the shelves in 2023 under the name of AXON 1. 

Since then, the ad platform revenues have outpaced their app-portfolio’s, and AppLovin is cash-positive again. 

On top of that, their algorithm is still improving. From their 2Q24 earnings call: 

“Our software business had 5% revenue growth quarter-over-quarter because our models continue to improve.

[...]

Continued improvement from our models as they learn from more data. As our models gather more data, they'll become more accurate and find more good users for our advertisers, gains that our team delivers to the efficacy of our models through enhancements”

However, they also acknowledge that there is a limit to what they can deliver: 

“Our platform is entirely performance based. In other words, gaming advertisers who market on our platform generate a measurable revenue and profit from the dollars they spend on our platform.

Our customers run marketing campaigns with target return goals, but tend to have a much higher appetite for spend on our platform than we can deliver today. And why can't we deliver more today? Because our current system can only find a limited number of users who will meet their revenue goals.”

The shift to eCommerce

AppLovin’s latest move is why we’re talking about them today. 

They’ve launched a pilot web advertising program allowing eCommerce shops to advertise through their mobile gaming ad network. 

This is an entirely new category of ad to hit mobile gamers, meaning it’s a bit of an untapped market. 

AppLovin reports better-than-expected results in early testing and the market is bullish. 

Takeaway: As Jordan West said about the death of SMS marketing, “marketers ruin everything”. This looks like a jump-on-while-its-fresh opportunity that will soon get saturated as with every other channel out there. 

Get in while the gettin’s good!

New tool profile - Address Guard

You’re spending $10,000 too much on shipping fees every month. 

And you don’t even know it. 

Here’s why… 

Small print and hidden fees are the silent killers of profitability.

They’re concealed at the bottom of contracts and in the cracks of operations. 

For instance - did you know carriers like UPS, Fedex, and DHL charge between $19-$25 for something as trivial as a period next to the letter “N” for “North” in a street address?  

That’s just a tiny example of the “bonus” costs and surcharges you face every time you ship something:

  • Additional holiday surcharges

  • Re-routing and fees for undeliverable packages

 etc. 

The Solution:  Address Guard

Brands are NOT protected from these issues by Shopify’s address autocomplete. That system recommends but does not verify. 

If you’re a high-volume shipper, you need a comprehensive platform like Address Guard to protect you from customer mistakes and hidden carrier costs. 

Address Guard not only verifies each customer’s address, email, and phone number, but it also allows you to establish a rules-based process to flag and hold any potentially risky orders.  

Don’t deliver to PO Boxes? No problem. Flag it and hold it - before it gets shipped and returned on your dime. 

Create custom workflows built on your policies. 

BFCM is coming:  

The Q4 shopping season = lots of orders…

And that means lots of customer errors, misships, and carrier surcharges too. 

Protect yourself today for just pennies per order with Address Guard. 

Claim your special offer and get free address verification until November 15th to find out how Address Guard can increase your bottom line while lowering customer service headaches. 

How’s your static ads game?

Video creation gets a lot of attention in eCom these days, but static ads still crush for a lot of advertisers out there. 

If you haven’t brushed up on your static game recently, Alex Cooper from adcrate.co shared a Twitter crash course on how he does statics. 

Here’s his guide on how to up your game:

What you don’t want to be

Like everyone else. What is everyone else doing, according to Alex? Focusing on the wrong stuff, i.e.

  • Fancy design

  • Clever headlines

What they should be looking at:

  • Simple callouts deliberately targeting their USP 

  • Psychology-based design

KISS (keep it simple, stupid) 

  • Don’t obsess over-complicated design or witty headlines. 

  • Call out your USP directly and deliberately.

Use psychology-based design

People scan ads in a fraction of a second to decide whether or not they are actually going to pay attention. 

Be intentional with how you:

  • Place and size images

  • Place and size headlines

  • Craft the headline message

  • Use fonts and colors

  • Handle text wraps/distortions

  • Apply text highlights

  • Position arrows

Assume people don’t know or care about your brand

Your messaging = be clear on the value prop.

Consider Warm audiences will convert from good ads made for cold audiences, but cold audiences won’t convert from good ads made for warm audiences.

So focus on top-of-funnel audiences, but do it well. 

Example: if advertising for cozy slippers:

  • ❌ “You won’t leave home”

  • ✅ “No more cold feet this winter” 

Which do you think works best?

It’s about emotion

Philip Kotler found out about this in 1969 and it changed marketing forever. People buy not for the cold, hard specs of the product but for the emotions they’ll feel when they have it. 

You want your messaging to make them imagine that emotion. 

As Alex says: “Make them feel something”. 

Example: 

  • ❌ “The sexiest summer shirt” 

  • ✅“How she wants your shirt to fit” 

Say less

If you can say the same in fewer words, do so. 

Here’s a cheat for achieving this: Alex always feeds his ad copy into ChatGPT and asks it to do just that. 

Takeaway: these are solid advertising fundamentals. How do your statics compare?

Wordplay, branding, and car crashes

Liquid Death, the renowned canned water company with badass branding, has just released a new product line. 

Soda Flavored sparkling water. 

Seems like a trivial difference, but this type of wordplay can pay off big time. 

Got 10 seconds for a little story? 

The Patagonian toothfish was pretty unknown to the world until a seafood wholesaler from Los Angeles called Lee Lantz “discovered it”. It didn’t sell very well until Lantz renamed it from “toothfish” to “sea bass”, adding a “Chilean” to make it sound exotic. 

The “Chilean sea bass” rebrand worked so well the fish nearly went extinct. 

Shakespeare once wrote that “a rose by any other name would smell just as sweet.” 

Technically true, but Romeo probably would not have given Juliet a bouquet of “thorny stinkweed.”

In many ways, language shapes our perception and understanding of the world. 

Consider The Car Crash Experiment conducted by Loftus & Palmer in 1974.

The subject of the study was how subsequent information can impact eyewitness testimony. Part of the theory was that even something like a leading question can alter people’s memory of something.

Here’s the study design:

“Forty-five American students from the University of Washington formed an opportunity sample.

This was a laboratory experiment with five conditions, only one of which was experienced by each participant (an independent measures experimental design).

Seven films of traffic accidents, ranging in duration from 5 to 30 seconds, were presented to each group in random order.

After watching the film, participants were asked to describe what had happened as if they were eyewitnesses.

They were then asked specific questions, including the question “About how fast were the cars going when they (smashed / collided / bumped / hit / contacted) each other?”

Thus, the IV (independent variable) was the verb of the question, and the DV (dependent variable) was the speed reported by the participants.”

Here’s what they found:

“The estimated speed was affected by the verb used. The verb implied information about the speed, which systematically affected the participants’ memory of the accident.”

Takeaway: Language and messaging matter. A lot. 

As the tools of digital advertising have expanded and become richer, a lot of focus has settled on sexy stuff like generative AI, video editing, UGC, social channel tactics, etc. 

But don’t neglect your copy. It is foundational to your efforts. If you don’t have a great copywriter right now, find one. If you do, you should probably give them a raise. 

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