Headphone and ear protector company Flare Audio is one of the many direct-to-consumer businesses racking up sales using digital media.
The UK-based company generated nearly $9 million (5.9 million pounds) in sales last year after launching in 2016 with Kickstarter and Indiegogo crowdfunding campaigns.
“Our company wouldn’t be here if it weren’t for digital marketing,” said founder and CEO Davies Roberts. “When you have disruptive technology, you are under attack. Now you can socially prove your technology and get past that seed stage quickly.”
But often the only marketing option for direct-to-consumer startups is Facebook. Flare Audio spends 85% of its budget with Facebook – but it’s not happy about it.
“We are very dependent on Facebook, and it’s too much for us to be comfortable with,” Roberts said.
To diversify, Flare Audio uses Taboola as its second primary online marketing channel. Flare Audio first used Taboola to raise awareness of its Indiegogo campaign for a new kind of ear protector. Its competitors also used Facebook and Taboola.
Now that its products have evolved past the initial crowdfunding stage, Flare Audio continues to spend on the two channels, with an additional search marketing budget. It also expanded into print with ads in trade magazines and the Financial Times.
“It’s very important to realize that if you just advertise on one medium, you are not that trusted,” Roberts said. “It’s very restrictive. You need to be on billboards, magazines and on people’s website, and that’s the holistic approach we continue to take.”
Taboola primarily serves as a branding vehicle for Flare Audio, Roberts said. The platform offers an efficient price for impressions and placement on sites it couldn’t normally access.
“The cheapest possible way to get your advert on the Daily Mail websites is Taboola, and that’s the true power of Taboola,” Roberts said.
Flare Audio can also optimize by publisher site and geographic area, making its campaigns more efficient over time. That’s allowed Roberts to sell products online in almost every country since Flare Audio’s inception.
But he hasn’t been able to make Taboola work for its performance marketing goals – yet. The reason Roberts spends 85% of his marketing dollars on Facebook is because it drives 85% of conversions.
“The challenge is generating brand awareness while creating enough sales to pay for that brand awareness,” Roberts said. “You can’t focus on one or the other. If you do, you are in trouble.”
Because Facebook “can hunt people down in a dynamic way,” it drives the majority of sales for Flare Audio, which the advertiser can only measure using last-click attribution, Roberts said.
Facebook’s dominance in driving conversions may decrease in the future. Flare Audio’s newest product, a pair of headphones at a lower price point, has been generating more conversions through Taboola. Because the product has more mass appeal, the highly targeted audiences on Facebook don’t offer as outsize of a benefit, Roberts hypothesized.
A self-serve alternative to Facebook?
Taboola’s ability to capture marketing budgets from advertisers like Flare Audio is new. The content recommendation engine launched a self-serve platform for small advertisers a year ago. Since then, it’s grown into a $100 million run-rate business, about 10% of Taboola’s overall revenue, according to CEO Adam Singolda.
Singolda likes ads that showcase innovative, interesting products, which make Taboola’s platform better. “Having diversity in the brands we recommend is key as it means we can better personalize the experience for consumers,” Singolda said.
But making small advertisers aware of Taboola can be an expensive challenge in B2B marketing. Once they use Taboola, SMBs need to figure out how to make the platform work for them. “Even Google, which has made a massive investment, only has 6 million to 7 million out of 120 million small advertisers,” Singolda said.
Singolda hired Elad Simon, an ex-Googler who focused on the search giant’s SMB market, to helm the business. To attract more small marketers, Taboola recently integrated with HubSpot to allow HubSpot’s 40,000 marketers to amplify blog posts with Taboola’s product.
Perhaps because of these customer acquisition challenges, Taboola is in the minority of ad tech companies trying to address the self-serve market. Upstart brands usually turn to Facebook and Google first, one of the reasons why Facebook and Google are capturing 90% of the growth in advertising spend.
The most recent IAB “Internet Advertising Revenue Report” called out this problem: “A lack of self-service tools … may be restricting the number of advertisers who are aware of and active on all but the most popular platforms. There is room for further democratization of digital advertising.”
As for Flare Audio, it will continue to diversify its marketing channels. Despite a background in audio, not marketing, Roberts buys all the media. A couple of creatives on the staff of 27 design the ads.
But soon the startup will take the next step: Roberts will hire Flare Audio’s first paid social media manager to take over its budgets on Taboola, Facebook and beyond.