‘Endless digital shelf’: Why some DTC brands are doubling efforts on Amazon
Direct-to-consumer brands are moving ad dollars to Amazon. The strategy is a result of the Covid-19 pandemic, as these brands are taking advertising and marketing dollars that would’ve been spent on in-person activations and shopper marketing to the platform as people continue to limit in-person shopping.
For example, DTC soda alternative drink brand Poppi doubled its advertising and spend efforts on Amazon after seeing initial success on the platform, according to founder Allison Ellsworth. The company’s ad spend on Amazon is up more than 500% since last March, according to a spokesperson via email, though she declined to provide exact figures.
Poppi isn’t alone in shifting advertising and marketing dollars initially set aside for influencer dinners and in-field marketing efforts to e-commerce. Like Poppi, DTC supplement brand Olly took its ad dollars to channels like Instacart and Amazon, said Emily Zwerner, Olly’s director of marketing communications.
More DTC brands will likely continue to grow their advertising presence on such platforms, according to some buyers. With the shift in consumer behavior, many are staying at home and cozying up to the idea of safely ordering everyday items from their phone to be delivered straight to their door. The change makes it necessary for DTC brands to be on those platforms, buyers said.
On Amazon, Olly invests a significant portion of its ad spend on search and Amazon’s DSP. With a focus on rapid growth almost a year into a global pandemic, search is key in Olly’s strategy, Zwerner said.
These DTC brands’ leaders said their investments in other e-commerce offerings wouldn’t have happened as quickly had Covid not accelerated the industry’s push for digital advertising. Before the pandemic, many brands were focused on winning brand affinity, as Digiday previously reported. But with consumers staying at home, mastering e-commerce has become top of mind for brands and buyers believing the increase in advertising on e-commerce giants like Amazon and Instacart will continue long after the pandemic.
“Additionally, as consumer behavior and media habits changed, we had to shift our investment to reflect that evolving behavior,” said Zwerner in an email.
Olly declined to share the team’s marketing budget, but Zwerner did say they’re doubling it in a “year that we’re going to put a stake in the ground and grow quickly by driving a lot of awareness in a short time period.”
Last spring, Poppi appeared on the business reality television series Shark Tank to promote its product and consumers flocked to the brand’s Amazon page, according to Ellsworth. “It really catapulted us digitally forward on Amazon,” she said.
While influencer marketing takes up the largest chunk of Poppi’s digital ad spend at 60%, the drink brand has a separate budget for Amazon, which she called “a whole other world.” The nation’s various stay-at-home orders only reprioritized ad dollars to Amazon.
“It forced us to pay attention to it earlier,” Ellsworth said. “All of that stuff in-field has had to shift digitally.”
Since then, Poppi increased its budget for search and programmatic display ads as it has seen increased sales. Poppi sales saw a notable jump since last March. In April, the brand also saw a significant jump in its conversion rate (although they declined to share specifics) on its top performing variety pack, the spokesperson said in an email.
Consumers are bound to continue valuing the convenience of online shopping, said Allison Lewis, vp of commerce media at Wunderman Thompson Commerce, who added the shift in behavior is “forever changed because of the pandemic.”
“The endless digital shelf has provided new opportunities for companies to expand their brand,” Lewis said in an email. “Creating a robust media strategy that includes Amazon is vital to continue to grow as a digital brand.”
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