How 'Going Direct' Changes Everything: for Brands, Retail, Marketing, and Advertising | Summary and Q&A

TL;DR

Marketing is undergoing a fundamental change, allowing brands to have direct access to consumers through crowdfunding, promotional transparency, and experiential shopping.

Key Insights

• 😑 Brands are gaining direct access to consumers through crowdfunding platforms and pre-orders, bypassing traditional intermediaries.
• 🎯 Platforms like Instacart provide brands with valuable consumer data, enabling targeted marketing campaigns and personalized promotions.
• 👻 Experiential shopping platforms like Pinterest allow brands to engage directly with consumers, gathering feedback and creating a loyal community.
• 🔬 The role of marketers is shifting from artistry to science, with an emphasis on data analysis and optimization.
• 💨 The traditional advertising model is being challenged, with brands seeking more efficient and effective ways to connect with consumers.
• 🤗 This shift in marketing opens up opportunities for new companies to emerge and capitalize on the direct response trend.
• 👻 Consumer behavior and preferences are becoming more transparent, allowing brands to make informed decisions and predict demand.

Transcript

I'm here to talk about something that we're calling a direct response 2.0 and it the thesis is there's a fundamental change going on in marketing that is letting brand get access to consumers directly for the first time in in a long time probably since the advent of mass media so let's break in for most of recent marketing history the brands have h... Read More

Questions & Answers

Q: How have crowdfunding platforms changed the marketing landscape for brands?

Crowdfunding platforms like Kickstarter have allowed brands to interact directly with consumers, gaining insights into their preferences and raising funds for product development. This has eliminated the need for traditional intermediaries and provided brands with valuable consumer data.

Q: What advantages do brands gain from using promotional transparency platforms like Instacart?

Promotional transparency platforms like Instacart provide brands with detailed information about consumer purchases, allowing for targeted marketing campaigns. Brands can analyze consumer behavior and preferences, predict demand, and inform production decisions, all without the need for traditional advertising.

Q: How are experiential shopping platforms like Pinterest changing the way brands engage with consumers?

Experiential shopping platforms like Pinterest provide brands with the opportunity to showcase products to their followers and communicate directly with them. Brands can release exclusive content, gain valuable feedback, and use consumer data to optimize marketing strategies.

Q: What skills and capabilities are required for marketers in this new era of direct response marketing?

Marketers need to shift from an artistic approach to a more scientific one, focusing on optimization and data analysis. They must be skilled in leveraging new platforms and tools, understanding consumer behavior, and creating personalized marketing campaigns.

Summary

This video discusses the concept of "Direct Response 2.0" and how it is revolutionizing marketing by granting brands direct access to consumers for the first time. The traditional barriers between brands and consumers, such as retailers and mass media, are being disintermediated by platforms like Amazon, Facebook, and Google. This shift has made marketing a guessing game, but Direct Response 2.0 aims to minimize guessing by allowing brands to interact directly with consumers and gather key information on consumer behavior. This video dives into three main aspects of Direct Response 2.0: the rise of crowdfunding, the importance of promotional transparency, and the emergence of experiential shopping.

Questions & Answers

Q: What is Direct Response 2.0 and how is it changing marketing?

Direct Response 2.0 refers to a fundamental change in marketing that allows brands to have direct access to consumers. In the past, there were barriers like retailers and mass media that prevented brands from interacting directly with consumers. With the rise of platforms like Amazon, Facebook, and Google, these barriers are being disintermediated, providing brands with the opportunity to talk directly to consumers and gather valuable information on their behavior.

Q: How is crowdfunding playing a role in Direct Response 2.0?

Crowdfunding is one of the notable aspects of Direct Response 2.0. Crowdfunding platforms like Kickstarter and Indiegogo have gained popularity, and brands are leveraging them to gain access to consumers directly. This allows brands to receive pre-orders for their products and gauge the demand before even producing them. This shift from traditional retail to crowdfunding provides an interesting investment opportunity for new companies that are taking advantage of this trend.

Q: Can you give an example of a successful crowdfunding campaign?

One example is Soylent, a controversial food replacement product that gained traction through crowdfunding. Soylent raised $750,000 in a Kickstarter campaign and continued to perform well. This success led to further investment and turned Soylent into a thriving company, proving that crowdfunding can be an effective way for brands to gain access to consumers and secure funding for their products.

Q: How are brands benefiting from pre-order campaigns?

Pre-order campaigns provide brands with several advantages. Firstly, brands can mobilize their community around the act of purchasing, creating a sense of unity and excitement. Secondly, pre-orders allow brands to predict demand and inform production decisions, ensuring that they build the right amount of products without wasting resources. Lastly, pre-order campaigns provide brands with direct consumer relationships, enabling them to gather valuable insights and information for future marketing initiatives.

Q: What is promotional transparency and how is it changing marketing?

Promotional transparency is another aspect of Direct Response 2.0 that is transforming marketing. Traditionally, marketers have struggled with knowing which portion of their advertising budget is being wasted. With promotional transparency, brands can gain insights into the effectiveness of their advertising efforts by leveraging new tools and services that enable them to go directly to consumers. This allows them to optimize their marketing strategies and drive better results.

Q: How are new companies helping brands achieve promotional transparency?

New companies are emerging to provide brands with the ability to reach consumers directly on new mediums and channels. For example, Instacart is an on-demand grocery delivery service that partners with grocery stores. Through this partnership, Instacart is able to track and know what users have bought during each visit to the grocery store. This level of insight allows brands to be smarter in their approach to promotion and offer personalized experiences to consumers.

Q: How does promotional transparency benefit both consumers and brands?

For consumers, promotional transparency means gaining access to products and becoming part of a movement or community. They also have the power to influence product development by purchasing items in pre-order campaigns. For brands, promotional transparency is a game-changer. It allows them to mobilize their community, predict demand, inform production decisions, and establish direct consumer relationships without the need for excessive spending on traditional mass media advertising.

Q: What is experiential shopping and how is it different from traditional e-commerce?

Experiential shopping is a concept that goes beyond traditional e-commerce. In traditional e-commerce, the focus is primarily on product search and finding the best deals. Experiential shopping, on the other hand, emphasizes the browsing and discovery aspects of shopping. It aims to provide users with a more immersive and personalized experience. Platforms like Pinterest and Instagram are trying to influence the exploration and discovery steps of the purchase funnel by helping brands connect with consumers in a more direct and engaging way.

Q: How has traditional television viewership changed in recent years?

Traditional television viewership has experienced a significant decline, especially among younger demographics. The rise of streaming services and alternative platforms has led to a 38% loss of 18 to 24-year-old viewers. In general, the total audience for traditional television has also decreased over the years. This shift in viewership has resulted in increased pricing for advertising on traditional television, creating challenges for marketers trying to reach desirable consumer segments.

Q: How are companies like Pinterest and Instagram changing the marketing landscape?

Platforms like Pinterest and Instagram are trying to address the challenges faced by marketers in reaching consumers through traditional mediums. These platforms aim to influence the exploration and discovery steps of the purchase funnel, offering new opportunities for brands to connect with consumers. For example, J.Crew uses Pinterest to provide its followers with early access to their style guides and product roadmaps. This direct communication with consumers allows brands to gather feedback, understand consumer preferences, and tailor their offerings accordingly.

Takeaways

Direct Response 2.0 is revolutionizing marketing by providing brands with direct access to consumers and eliminating the intermediaries that have traditionally stood between them. The rise of crowdfunding, promotional transparency, and experiential shopping are key aspects of this shift. Brands can now interact directly with consumers and gather valuable information on their behavior, allowing for more targeted and efficient marketing strategies. This requires new skill sets and capabilities within marketing teams, as well as a shift from art to science in the marketing approach. Startups and platforms that embrace these changes have significant investment potential.

Summary & Key Takeaways

• Traditional marketing has relied on intermediaries like retailers and mass media to connect with consumers, resulting in a guessing game regarding consumer behavior and product demand.

• Crowdfunding platforms like Kickstarter and mainstream pre-orders, as seen with Tesla, are allowing brands to interact directly with consumers and gain valuable insights into their preferences.

• Promotional transparency platforms like Instacart enable brands to have access to detailed information about consumer purchases, allowing for personalized marketing campaigns.

• Experiential shopping platforms such as Pinterest are changing the way brands engage with consumers by providing early access to products and fostering direct communication.