Here’s today’s AdExchanger.com news round-up… Want it by email? Sign up here.
Warby Parker and Allbirds, two DTC standouts, filed their pre-IPO S-1s last week. It was a reminder of the challenges facing digitally native vertical brands (DNVBs). Each company had its best sales year in 2020, with strong growth rates and retail businesses. (Warby has 125 stores, and Allbirds boasts 27 locations.) But neither is profitable. And each faces a tough customer acquisition market, with steep marketing costs preventing sales growth from flipping to profit. Many people were seduced by DTC brands’ strong earned media and data-driven advertising chops. But there’s no inherent advantage to being a DTC brand, according to a Forbes report. Allbirds and Warby Parker earned about $200 million and $400 million last year, respectively. Procter & Gamble owns 22 brands that sell more than $1 billion per year. In the past two years alone, Target has launched 11 brands that each sell more than $1 billion annually. “It turns out that owning an existing relationship with customers (in the case of incumbent retailers), or strong customer awareness and distribution (in the case of incumbent brands) are formidable advantages that DNVBs are struggling to overcome.”
Gotta Catch’em All
Pokémon is on a marketing partnership push, with the launch of a special package of Krispy Kremes earlier this week, followed by a deal with Oreo to produce Pokémon-etched versions of the cookies for fans to collect. These co-marketing deals could be data wins for the brands, since the Krispy Kreme packs are only available online and the Pokémon-branded Oreos can be purchased from the Oreo site before packages go to stores. Pokémon, which is co-owned by Nintendo, is an old hand at co-branding deals. But Pokémon is going all-out right now, in part, because its latest animated film hits Netflix in early October. Pokémon GO will have direct marketing tie-ins for the film. But getting Pokémon products in front of kids this month (even via their parents’ shopping carts) has much bigger implications for the company than stand-alone marketing deals.
Ah, clickbait … that never-ending rabbit hole. At first, a headline about, say, your favorite celebrity’s fitness routine or why they turned down a movie role pulls you in. In reality, the page is riddled with ads that crowd out the news … if you even get to it all, several clicks through an infinite slideshow. But the revenue generated from clickbait ads is too irresistible, prompting companies like Perion to spin up “made for advertising” websites, reports Morning Brew. Content recommendation platforms such as Taboola and Outbrain put ads for “made for advertising” content on legitimate news sites like CNN and USA Today. “On the other side of this clickbait wormhole is a potential billion dollar industry across the globe, as these sites suck up programmatic ad dollars,” Morning Brew’s Ryan Barwick writes. Jounce Media said clickbait is raking in 12.3% of programmatic web display ad spend globally. And why not? It’s cheap, and it meets advertisers’ standards for fraud and brand safety. But clickbait is somewhat sketchy because the sites offer little value in terms of actual content, and some SSPs who have standards in place against such ad experiences aren’t always able to weed them out.
But Wait, There’s More!
Sorrell’s deal-hungry S4 Capital cannot be dismissed as a WPP clone. [FT]
What TikTok’s growing threat to YouTube means. [The Information]
WFA, Ebiquity report says marketers have media “capability gaps.” [MediaPost]
(Most) SaaS cost tools suck. [Last Week in AWS]
A timeline of 2021 CTV innovation. [The Drum]
Why everyday electronics products often come with unexpected parts or functions. [Tedium]
Retail is poised to overtake banking as the top spender on artificial intelligence. [WSJ]
Zeotap clinches $11 million in Series C funding. [Adweek]
DanAds hires Joakim Lundberg as CCO and partner. [release]
Criteo taps Manuela Montagnana as chief people officer. [release]