As more brands focus on their own eCommerce sites as a direct touchpoint to consumers, “The State of D2C Marketing” is a new report that provides a candid look at related marketing, advertising, and eCommerce investments propelling the success of many of today’s direct-to-consumer (D2C) brands.
The report reveals trends across verticals and company size, including that 52% of respondents are increasing investment in Facebook ads, compared to 18% investing more in Amazon Ads. Produced by leading commerce marketing provider Yotpo, in partnership with Magento, an Adobe company, the report debuted at Magento Imagine 2019, currently underway in Las Vegas, Nevada.
The State of D2C Marketing is based on an online survey conducted March-April 2019 of more than 500 eCommerce and marketing leaders at D2C brands, 41% of whom are brand founders. The respondent base represents online merchants in a variety of verticals from across the globe, with online stores built on eCommerce platforms including Magento, Shopify, Salesforce Commerce Cloud, SAP Hybris, BigCommerce, WooCommerce, and more.
The State of D2C Marketing 2019 uncovers new industry insights, including:
Key Marketing Priorities
- The leading priorities for today’s D2C brands are eCommerce sales [60%], customer acquisition [54%], and conversion rates [53%].
- However, priorities differ depending on company size.
- Brands with under $5 million in annual revenue are looking to drive revenue growth (eCommerce sales).
- Mid-sized brands between $5–$100 million care about both market penetration (customer acquisition) alongside revenue growth (eCommerce sales).
- Meanwhile, the largest companies (over $100 million) generally aim to optimize their marketing efforts (conversion rates).
Marketing and Ad Spend 2019 vs 2018
- To fuel customer acquisition, the majority of respondents [52%] are increasing investment in Facebook ads, compared to only 18% investing more in Amazon Ads.
- Once again, investments diverge for the different segments:
- Small brands, who count social media as their primary customer acquisition channel, are investing in Instagram Ads at higher levels than the industry overall.
- Mid-sized brands with higher brand recognition likewise attract customers via social media but also through SEO and direct traffic. Accordingly, this segment– notably more than any other in the industry–is increasing spend with Google, in both Ads (60%, +13 percentage points above average) and Shopping Ads (42%, +10 higher).
- The largest, most established brands report social media as a lesser acquisition channel compared to SEO and direct traffic. While these brands with their budget firepower outpace the industry in increasing spend in every channel, Facebook dominates as the largest investment (63%, +11 above average).
Optimizing eCommerce Sales
- In today’s digital-first commerce environment, D2C brands consider customer reviews as foundational for their sites, with nearly 3 of 4 brands [73%] having implemented the feature.
- Segments have a different approach to implementing other forms of user-generated content like customer photos and customer videos:
- Small brands are the most advanced in adopting those community-building features, outpacing the industry in the planned implementation of customer photos (36% vs. 32% industry average) and customer videos (43% vs. 39%).
- Mid-sized brands outperform the industry in implementing customer photos (40% vs. 36%) with more than a third 35% looking to deploy customer videos.
- Large brands, potentially late to considering eCommerce as a top priority, are currently underinvested when it comes to reviews (68% vs 73% industry average) and so is planning to implement the feature accordingly (25% vs 20%).
In the report, Tomer Tagrin, CEO & Cofounder of Yotpo, comments on the central role eCommerce plays in brand growth and survival: “In the D2C approach, the website is both the brand and the store: story, mission, style, products, transaction, and service. Unlike the limitations of physical stores, eCommerce can give businesses access to a wider and global base of potential customers. Additionally, the lower overhead can provide the resources for businesses to persist amidst changing market conditions.”
The State of D2C Marketing 2019 is available in both print and digital formats. To access the full study which features additional analyses on referrals, loyalty programs, and findings by industry verticals, visit the Yotpo blog.