Digitally-native direct-to-consumer brands are super-smart performance marketers, but they also appreciate the importance of branding – and they’ve been spending big on out-of-home advertising, particularly in the New York subway system.
“The MTA is very excited,” said Erica Amatori, director of marketing at Burrow, a less than two-year-old DTC customizable sofa brand headquartered in Manhattan. “They’ve noticed this trend – and it’s definitely being reflected in the prices.”
Buying out half the ads on one side of an entire train, for example, went from $250,000 a month to over $300,000 this year.
“These ads also let us hit our core demo, which is split evenly between males and females in the 25 to 35 age range who have a household income of $80,000-$100,000 and more.”
But, it’s worth it – at least for now. New York City is a petri dish of journalists, media buyers, startups and tech-savvy young professionals, and that makes it an excellent test market for new marketing initiatives, Amatori said.
“New York is the test budget for everything we’re doing,” she said. “We’re testing out-of-home in our best-selling city, which is New York, because that’s where awareness is highest. If it performs, we take it to other metro areas, like DC, LA or Chicago.”
When Burrow ran a subway ad campaign earlier this year with its branding agency Red Antler, direct site traffic increased by more than three times and organic traffic doubled. In a post-transaction survey, 60% of people attributed their purchase of a Burrow sofa to the brand’s subway ads.
“We thought subway ads were just top-of-the-funnel, but we’ve found that they’re actually a really big part of a buyer’s decision process,” Amatori said.
AdExchanger caught up with Amatori to talk OOH, measurement and why DTC brands are so obsessed with subway ads.
AdExchanger: How would you describe Burrow’s approach to marketing?
ERICA AMATORI: We have a fairly diverse marketing mix – digital, out-of-home, broadcast – which you need when you’re selling a bigger ticket item like a piece of furniture. You need to touch customers at multiple points throughout their day.
Our strategy is very focused on brand and creating a message people can relate to, something witty that’s good enough to share with their friends.
Why are so many DTC startups into subway ads?
Part of it, honestly, is because we all observe what other DTC brands are doing. If something seems to be working for others, we all jump on it. But subway ads are also a unique, memorable spot that people look at while they’re sitting still. It’s not like a billboard or a bus shelter that you’re driving by or walking past.
New York is a big city; most people commute, and we get a lot of impressions. These ads also let us hit our core demo, which is split evenly between males and females in the 25 to 35 age range who have a household income of $80,000-$100,000.
Now that so many DTC brands are buying subway ads, does the MTA ever run out of inventory for you?
You definitely need to book ahead of time, but the bigger challenge is the creative piece. We need to give the creative team a lot of time to design subway ads, because they’re all different shapes and sizes. It’s a huge undertaking.
How do you measure that your subway ads are working?
We use data to track brand lift. Out-of-home is about measuring the net effect correctly. A lot of brands are moving away from promo codes, but we still use them, because we’re a new brand and we want to track every data point possible. But the real objective of OOH is to impact the top of the funnel, so you really have to think about which success metrics matter in that case, and it’s often not conversions but rather traffic increases. Our subway ads lifted our direct and organic web traffic.
But then, as people start to know your brand, your cost per click decreases. A well-known brand like Casper or Allbirds can spend $50,000 on Facebook ads and we can spend the same, but they’ll probably get a higher click-through rate and a lower CPC because their brand awareness is higher. That’s why it’s important to have a good portfolio mix.
We also ask people to fill out two-question post-purchase surveys, which really helps with attribution. “How did you hear about us?” is the best question of all time, especially when you’re running something, like OOH, that’s often not getting the attribution credit it deserves.
Are you testing other forms of out-of-home?
We’re also testing OOH in downtown Brooklyn right now with billboards and ads across bus shelters and Citi Bike kiosks. The idea is to compare the results to a sister ZIP or another city with similar traffic and conversion rates to see if there’s any lift.
Is Burrow testing other traditional channels?
We just started TV at the beginning of September and we don’t have results yet. We’re only testing it in very specific cities as a way to increase reach. We’re putting geographic parameters around TV to see if it has an impact compared with other cities that are similar in terms of conversions. But, we’re also doing CTV and Hulu ads because we can more uniquely target our demo there.
