The D2C Brand Wars Have Begun And Mobile In-App Ads Are Playing A Major Role
As more D2C brands flood the market, CACs soar ever higher across traditional marketing channels. In-app, along with other emerging channels, will deliver the edge these brands need to compete in the next evolution of the direct-to-consumer economy, writes, Aaron Thandi, Director of Performance Sales, Tapjoy.
It’s official: Traditional retail is dead. Welcome to the direct to consumer age.
Today, leading direct-to-consumer brands have turned the retail world upside-down. In the beginning, they were just small startups competing against entrenched brands that, in many cases, monopolized entire sectors. Initially, the secret to their success was outspending everyone else. But now that the D2C space is approaching saturation, customer acquisition costs are rising and marketing budgets aren’t generating the same ROI. The heyday of traditional retail may be over, but the D2C brand wars are just beginning.
In the face of stiff competition, D2C brands need to play to their strengths — namely, their status as marketing innovators. Above all, D2C brands need to level up their mobile strategy. Consumers spend over three whole hours of every single day in mobile apps. Yet, in-app is still largely underutilized, which makes it an ideal play in today’s crowded space. What’s more, D2C brands that prioritize in-app marketing continually validate their investment with high conversion and retention rates: It’s a secret weapon for the D2C age.
Learn More: How Apps Can Help EMEA Retailers Reignite Growth
Mobile In-App Ads Are the Most Engaging. Period.
Mobile in-app advertising is the most powerful tool in the D2C playbook. Mobile is highly intimate and engaging and, unlike TV, every ad served returns a wealth of data. Mobile in-app has an edge over mobile web because app users are more invested in the content they consume. That’s why it’s widely considered the ideal testing ground for high-impact creative formats. Also, it’s where playables, the most innovative ad format of the last decade, were born.
These disruptive mini-games are already a cornerstone of UA strategy for mobile apps, and now D2C brands have begun to recognize their value. These ads are priced on a CPE (cost-per-engagement) basis, as opposed to the classic CPM model, which means that ad spend goes towards memorable one-to-one engagements — the kind that foster brand affinity and boost customer LTV. Playables translate into measurable ROAS while increasing brand visibility. Seizing this opportunity early will give brands a leg up in the D2C wars.
Mobile Ads Personalize the Experience and Put Customers First.
Most D2C brands use mobile advertising in some capacity, but they don’t leverage the full scope of capabilities mobile has to offer. They tend to rely heavily on social media, which, despite its considerable merits, is incredibly saturated with D2C competitors. It’s a constant battle for eyeballs, and consumer attention is the casualty.
Emerging mobile ad formats give brands the opportunity to put consumers first. One example is rewarded advertising. Users get something valuable right out of the gate, and brands only pay when users complete a specific action — it’s a classic value exchange. My experience at Tapjoy has taught me that rewarded is also the best way to drive results. These undisruptive, opt-in formats give users more choice, and when choice meets modern targeting, that strategy is akin to a superpower.
Personalization is another opportunity that mobile in-app has to offer. It’s no secret that personalized experiences are highly appealing to modern consumers, and innovative mobile ads open that door. For example, ad campaigns like rewarded quizzes are incredibly effective in the mobile in-app environment. Brands that base their business model on quizzes, like Ipsy or Skinsei, could showcase their value off the bat by rewarding mobile users for taking a quiz. The personalized results would then compel them to purchase organically. Meanwhile, the brand only pays for concrete results — NOT impressions — and that’s a major leg up over the competition.
Learn More: Opt In, Opt out – 5 Trends in Mobile Advertising
Mobile Ads Close the Marketing Loop.
Social is the perfect channel for brand awareness, but consumers often choose not to purchase while they’re perusing Instagram. They’re scrolling, eyes glazed over, then they see an ad for a dog sweater subscription. Then they get up, take their dog for a walk, and forget to sign up for sweaters at all. How can marketers close the loop?
Rewarded mobile ads do just that — they’re the perfect complement to a social strategy. Unlike on social, users are highly engaged when they’re in their favorite mobile games. Cost-per-action campaigns driving to a first purchase can be extremely effective in this environment. As any D2C marketer will tell you, testing is the best place to start. Why not see whether retargeting with rewarded can close the loop? In-app is still massively underutilized — it could be the key to out-maneuvering competitors as the D2C brand wars heat up.
Podcasts and Voice Marketing – the Next Frontier?
Mobile is highly engaged, but podcasts are the next best thing. It’s a hot time for this: The proportion of Americans listening to podcasts has nearly doubled in the past nine years. D2C brands like Audible are already investing heavily in podcast marketing by sponsoring content. These kinds of partnerships showcase the innovative spirit of the brand. Undoubtedly, podcasts will continue to be an important chess piece as the D2C brand wars heat up.
Similarly, voice marketing will soon become a prevalent strategy for D2C brands. Today, there are over 118 million smart speakers in US homes, representing 78% year-over-year growth. When this technology becomes more ubiquitous, voice search rankings will become highly competitive. For instance, when a consumer asks its bot to sign up for a razor subscription, will they receive a package from Dollar Shave Club or Billie? D2C brands will surely be on the frontlines when the opportunity arises.
Learn More: How In-Game Advertisements Are Benefitting Brands as Well as Gamers
The War Is On
D2C brands are experts at innovating where traditional retailers fail. They deliver simplicity, convenience, and quality at a lower price point. They tell stories that are so much bigger than the product. These brands are the optimal innovators, and they are leading the next evolution of retail. But now they need to keep the momentum going as more and more competitors enter the field. Those that come out on top in the D2C wars will level up their mobile strategy and continue to innovate in emerging channels. For my part, I’m excited to see what comes next.
