The DTC revolution is over – what’s next?

For years we were spoiled by $0.10 clicks that led to 10% conversion rates on $100 purchases (for those of you keeping score at home, that would be a 100x ROAS), but those day’s aren’t coming back. That opportunity led to massive success in the Direct-To-Consumer category, which brought us brands like Away, Allbirds, and Casper. Some of those brands are still around, but since their golden goose is no longer laying massively profitable eggs, they’ve have to pivot their strategies and, in many cases, significantly reduce their valuations.

But that’s not new. Throughout marketing history there have been major media opportunities that came and went – think of the mail-order catalogue, the home shopping networks, “guerrilla marketing,” and the early days of AdWords. Toward the end of each of those trends there were always a few perfectly suited brands that were still able to squeeze out returns, and a whole lot more who couldn’t figure out why the money machine wasn’t working anymore.

Through all of the peaks and valleys, the consistent truth has been that brands that invest in high quality owned media are the most sustainable, enjoy the strongest loyalty, and are able to take advantage of media opportunities when they come up.

Look at it this way: We’re all out there investing a lot of time and resources in a variety of different channels. When we’re successful, those efforts drive people to our websites, our retail locations, or anywhere else we do business. Those people take a look around and, if we do an amazing job, we’re able to convince up to 20%* of them to become customers. That means 80% of people are heading back out the door, never to be seen again. Now, instead of trying to throw increasing amounts of cash at the fleeting advertising opportunities on Meta, the smartest brands are shifting their attention to what they can control.

*Unbounce’s Conversion Benchmark Report tells us that only the best businesses in the best industries are able to achieve anything even close to a 20% conversion rate, but let’s use that number for the sake of this example.

So do we just give up on 80% of the people who we worked so hard to attract? A brand that does a great job of producing and offering its own high quality articles, white papers, podcasts, and/or newsletters gives themselves a chance to appeal to the people who are not ready to buy today. Clearly, they have some interest in what you’re up to, and today they may just be window shopping, so if you can convince them to consume, sign up, or subscribe to your content, you’ve converted that interest that may have been gone forever into a relationship that can be built upon.

Not to mention the post-purchase opportunity – without owned media, there’s no good reason for customers to maintain any sort of contact with us. They’re less likely to purchase again, and significantly less likely to refer a friend because we’re not giving them anything interesting to pass on.

I share this not only because it’s what the data is clearly showing us over time, but because the value of this owned media — our newsletter and articles — have been so incredibly valuable to us.

As I’m sure you’ve noticed by now, we never sell ads here, we don’t push our services, in fact, we don’t use it as a promotional tool of any kind. And yet, we can track nearly every client that we’ve done business with over the past few years to some sort of contact with our content, and nearly everyone who we’ve worked with continues to be a reader. And the benefits go far beyond transactions – we’ve been fortunate to gain friends, partnerships, collaborations, podcast appearances, and other earned media all because of our newsletter.

We’re not alone, either. Remember those DTC brands that relied so heavily on cheap ads for their growth?

So when we say that we know investing in owned media is worth the time and energy that it takes to do it consistently, we do so not just because we have seen the results for ourselves, but because that’s where the biggest beneficiaries of social advertising are also headed.