Brit + Co Banks On The Demise Of Banner Ads

Brit-Morin-Brit-and-CoWhen Google vet Brit Morin created Brit + Co to focus on the millennial DIY set, she didn’t want to rely on the web’s surest, most turnkey form of monetization: banner ads.

She thinks banner ads will become extinct. She also believes programmatic will fall by the wayside as advertisers choose branded content, video and native formats over the 300×250 boxes that dominated the web’s first act.

“Traditional banner ads are not extremely effective, especially for reaching a millennial audience that is mostly mobile,” Morin said.

With the aim of becoming the next Martha Stewart, Brit + Co developed a two-prong strategy focused on content and commerce. It started selling advertising in 2012, focusing on branded content and a single high-impact ad that Morin claims gets click-through rates multiple times higher than run-of-the-mill banner ads.

Then it added commerce. Recognizing its many crafting customers, Brit + Co developed a curated site in the same vein as Etsy. The business was successful but “didn’t feel differentiated,” Morin said. Then the marketplace grew more crowded when Amazon Handmade launched last fall.

All of that led to Brit + Co raising $20 million in Series B funding last year to pursue a different commerce strategy: DIY classes and kits. The 55 classes, delivered in an online video series with accompanying material kits available for purchase, range from fashion illustration and travel photography to building a social media brand. Morin’s 92-person company plans to double the amount of classes it offers in the next 6 months.

Morin talked to AdExchanger about how Brit + Co reaches its millennial female viewers, its all-in gamble on platforms and how it approaches monetization.

What is Brit + Co trying to do that’s different in this space?

We always planned to be a media company and a commerce company. When I started this 4 years ago, I knew I wanted to build the audience first and create great content that people would share. That’s why we didn’t truly test commerce until mid-2014 and didn’t double down on commerce until our Series B. We wanted to make sure there was an appetite for content and [to] stay true to our mission of igniting creativity.

Many other pubs have tried and exited content-commerce models, including your own company. Why is that?

We were producing millions of dollars of revenue in the first year, so it was less about the business not working. What we didn’t love so much was that it was expensive to scale the drop-shipping model, unless you were investing a lot of money into it. And it didn’t feel differentiated. What differentiated us more was the classes; it felt more like a natural concept to us.

How did working at Google inform what you’re doing now with Brit + Co?

I was there 2007 to 2011. When I moved to the YouTube team in 2008, 2009, I started to understand how content creators were leveraging the platform and what types of content resonated most for millennials, since they were the primary consumers of YouTube, and how brands thought about monetizing through video and platforms like YouTube.

When I started working on Google TV [the internet-connected set-top box and TV set is now Chromecast], my biggest awakening was that traditional media brands did not believe in monetizing their content unless there was a paywall in front of it. That was when the light bulb hit. A lot of the traditional media players were going to be slow in putting content online and monetizing it. That created a huge window for new media startups.

The other thing I took away was that this generation of millennials cares about connecting with real human beings and not brands. That was the impetus to put my name behind the company and have my name and face be the front of the brand. I felt like our audience wanted to learn from a real human.

How do you approach platform monetization? 

They are driving tens of millions of unique visitors for us, and we are bullish about monetizing content on social platforms. As we look at new product features like Facebook Live or even Snapchat on our brand story channel, we are actively finding new ways to monetize the investments our content team [makes in those platforms]. It’s just about who can move the quickest to figure it out.

What’s your perception of what advertisers want from publishers today?

I am hopeful that advertisers see that traditional banner ads are not extremely effective, especially for reaching a millennial audience that is mostly mobile. Mobile banner ads have proven to not work very well, while mobile branded content is a sure way to reach millennials. And the content has to be distributed in a place where millennials are going. For us, that means social networks. Advertisers that work with Brit + Co tap into our relationships with Snapchat, Pinterest and Facebook and reach a gigantic audience across the world.

If mobile banners don’t work, what happens to the whole advertising space that was built on 300x250s?

I think that side of the business will completely die. That was why we chose to never do banners. I do think there is potential for higher impact creative. We have one of our own, which we refer to as the “story plate,” and the conversions on that unit are triple or quadruple that of a traditional format. Contextual advertising and native content inside of a social feed is going to be more powerful [than banners]. That is why you have seen advertisers move their dollars from banner advertising to Facebook advertising, where it is inside a user’s feed.

What does that mean for the world of programmatic and ad tech?

It’s not going to die instantly. For media buyers, it’s an easy way to showcase reach. I just think there are so many formats to be experimenting with. A significant portion of the ad dollars that go into programmatic will go into branded video and live video, things like geofilters on Snapchat and native advertising on Instagram or something Pinterest has up their sleeve. That bucket of dollars that goes into programmatic will be shifting as brands and advertisers try new things.

What is Brit + Co doing with Facebook Live? 

We are doing a video nearly every day. We have tried to find our slant on what makes it compelling for our audience. The most recent show we have been producing, we are calling “Creative Request Live,” which is a throwback to the MTV show “TRL” or “Total Request Live.” This week, for example, we brought in a creative expert and are hand-lettering popular song lyrics from the ’90s on demand.

When you’ve raised money, are investors looking at you as a media company or a tech company? 

Our media business is our foundational business. However, we do get valued a bit differently because of the commerce business. They look at the brand like a Martha Stewart or even Disney. I would like to build a brand like Disney today. They have a product and merchandising offshoot and [have] diversified into a different category.

What’s ahead for Brit + Co?

There are three main priorities. One is continuing to work with advertisers in new and interesting ways. Given that we are an exclusive publisher on many social networks, we want to leverage that access for our advertisers. Second is scaling our commerce business through the online classes and kits and ensuring we have a different library of classes to choose from. Third is continuing to invest in video, from live video to 30-second formats to series.

Would Brit + Co create a TV series?

We don’t have anything currently to announce, but I have watched as brands like Vice build a name for themselves on TV. Video is the talk of the town right now. I think more pubs are going to be creating TV content and potentially owning TV channels. Ultimately, TV channels will live online or on traditional TV boxes as well. TV series are going to be morphing into one and the same.

What are media companies doing right – and wrong – right now?

People doing it right are embracing new platforms and features of those platforms quickly and experimenting how to monetize them. It’s definitely a risk. Any of these social networks could change their minds – their algorithms – or go out of business. It’s a risk, but it’s worth it right now. Media companies should diversify their audiences so they aren’t fully reliant on Google for SEO or Facebook or Pinterest. The healthiest startups have the most diversified traffic sources.

This is part of an interview series with media leaders about the future of digital advertising. Check out previous interviews with The Atlantic, Bloomberg Media, Evolve Media, E.W. Scripps, Forbes, Mic, The New York Times, Purch, Refinery29, Thought Catalog, Time Inc.,The Washington Post and Ziff Davis – and more to come. 

This interview has been condensed and edited.

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  1. Another Marketing pro that equates programmatic to desktop display only. Programmatic is a means for transacting on data or reducing the 3 month IO process or to reach users at scale. Programmatic wont be a word in 3 years associated with media buying, because it will be media buying.

  2. This is a joke right? Programmatic is going away? To be replaced by video, live video and of all things Snapchat filters. This interview would have been far more relevant on April 1st. Brit really believes that marketers and advertisers are going to abandon programmatic buying platforms? The same platforms that have fundamentally transformed the way brands leverage data and precisely target audiences. Only to be replaced by far less efficient contextual based targeting? Hell, why not just move everything back to print then?

    This whole “Millennial’s don’t…” trend is getting ridiculous. We’re written about as if we’re aliens from another planet. However, time and time again, the truth actually shows that Millennials are just like everyone else ( Yet we’ve been positioned as this unreachable audience that no one can understand and doesn’t respond to advertising. BUT and this is a huge BUT, somehow native ads and video work, miracles do happen. One day (hopefully soon) people will stop using misleading blanket statements, like “Traditional banner ads are not extremely effective, especially for reaching a millennial audience that is mostly mobile,”. Says who? Just took a look at some conversion data for an 18-35 audience and the conclusion is… banner ads work. Publishers need to stop telling advertisers/marketers what doesn’t work. Given there still are billions spent on banners every year, I find it very hard to believe they don’t work. If they didn’t, wouldn’t everyone be getting fired? I’m having a hard time understanding why advertisers would so willingly throw their budgets down the toilet on a format that doesn’t work. Perhaps the answer is that they do…?

    Brit + Co is in for a long road ahead if they choose to ignore programmatic buying. The market has spoken loud and clear and programmatic is going nowhere…in fact all signs indicate that brands are increasing their investment in programmatic, likely due to the success so far. Brit + Co has every right to market themselves however they see fit. If I were Brit, I’d focus on the quality & engagement of my audience in addition to our ability to deliver on customer business objectives, not ad formats. Marketers are not buying ad formats, they are buying outcomes and publishers need to demonstrate they can help achieve those outcomes. There’s way too much focus right now on what the right ad format is, what’s the best way to measure these new formats and so on…which has clearly led to a lack of focus on the fundamentals of media. The format of an ad is simply what gets someone’s attention and creates engagement, that’s the easy part. Trust and the relationship between publisher and audience is what delivers business outcomes, that’s how advertising works. Which is why premium publishers deliver better results:

  3. Mike Rappaport

    It’s extremely difficult for me to stomach yet another “demise of the banner ad” type of report. It’s preposterous. You do realize that banners are still HUGE drivers or revenue for mobile app publishers and big winners for advertisers, right? Yes, a lot of banners are ineffective and easy to overlook but that’s not the case with all of them. Take a good look at the stuff being cooked up by innovators in mobile advertising like Facebook and especially Airpush ( the success of Abstract Banners alone in the past year pretty much kills your argument). Can banners be better? In most cases, yes. Are they dying? Absolutely not.